Contribution to Charity
- Charity refers to an act of giving money, goods, or services to an organisation or individual who seeks help and is in need.
- Charity is made without receiving anything in return and charity is made freely without receiving any consideration from the person to whom the charity is made.
- Even though there is no consideration, a charitable donation will be considered a valid contract. For a charitable donation to be valid and enforceable, it must be made voluntarily and it shall be free from coercion or undue influence.
For example, Aishwarya promises to donate an amount of ₹1 lakh to an organization named ‘Being Good Human’. While relying on the promise of Aishwarya, the organization incurs expenses on manufacturing new shirts for people in need. Although the promise was made without consideration it will be considered as a valid contract.
No Consideration, No Contract : Exceptions and FAQs
For a contract to qualify as a valid contract, consideration is an essential element in the contract. Without consideration, no single promise can be enforceable. It is a term that is based on the maxim ‘quid pro quo’; i.e., something in return. Consideration is the price that is agreed to be paid by the promisee for the act done by the promisor. Section 2(d) of the Indian Contract Act, 1872 defines Consideration as “When at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing or promises to do or abstain from doing something, such an act or abstinence or promise is called a Consideration for the Promise“.
Geeky Takeaways:
- Consideration is an act of doing something.
- Consideration is an act of abstaining from doing something.
- Consideration must be made at the will of the promisor.
- Consideration might not necessarily take place between promisee and promisor, rather it can move from promisee to third party.
- Consideration may be either past, present, or future.
Table of Content
- Exception to the Rule “No Consideration, No Contract”
- 1. Agreement made on Account of Natural Love and Affection
- 2. Agreement to Compensate for Past Voluntary Service
- 3. Agreement to Pay a Time-Barred Debt
- 4. Completed Gift
- 5. Contract of Agency
- 6. Contribution to Charity
- 7. Remission of Contract
- Conclusion
- Frequently Asked Questions (FAQs)