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1. Consideration
Definitions
 The price of contract is called consideration
 Something givenfor something taken
Function and EssentialElements
1. By Promisee:-
Consideration by the promise or any other person.
2. Desire of the Promisor:-
It should be given at the desire of the Promisor.
Example 1:- Mr. Shah agrees to sell his "house for Rs. Twenty lac to
Mr. Amit. Now Mr. Amit promises to pay the amount is the
consideration for Mr. Shah's promise.
Example 2 :- Mr. Donalnd a Promisor agrees with Mr. Kim that if he
will abstain himself from filling a suit then he ( Mr. Donald ) will pay
him Rs. Ten thousand. In this situation Mr. Kim abstained from filling
suit is a consideration for Mr. Donald.
3. Consideration May Be Past, Present or Future:-
Consideration is an act which has already been done or in progress or
to be done in future at the desire of the Promisor.
I. Past Example: - Mr. Nash lost his car and Mr. Frank a finder delivers
it to him. Mr. Frank cannot demand payment of his services due to the
past consideration.
ii. Present Example: - Mr. Ali sells a house to Miss Sana. She pays its
price immediately. It is called present consideration.
iii. Future Example: - Mr. Shah promises to deliver a shop to Mr. Khan
after a one month for Rs. 1 lac upon the promise of Mr. Khan to pay the
agreed price at the time of delivery. It is called future consideration.

2. 4. Must be real:-
Consideration must be realistic and competent. If consideration is
physically impossible, illegal and uncertain it will be not valid.
5. Needs not to be adequate:-
The law only insists on the presence of consideration and not on its
adequacy. Inadequacy may create the doubtabout the free consentof two
parties but it is valid if free consent is proved.
Example: - Mr. Kullo agrees to sell his house for Rs. 25 lac. If the consent
of Mr. Kullo is free then agreement is valid contract, without
consideration.
6. Lawful Consideration: -
Consideration should be unlawful because it cannot form a valid contract.
It should not be against the public policy
EXCEPTIONS
No doubt without consideration agreement is void but it has also
exceptions which are following:
1. Case of Love:-
Consideration is not compulsory if an agreement made between the
parties for natural love and affection.
2. Case of an Agent:-
The contract of agency requires consideration, where the contract is a
promise to appoint an agent.
3. Case of Voluntary Services:-
In case of compensation for voluntary services there is a relaxation of
consideration.
4. Case of Donation:-
Agreement made for donation is not enforceable for want of
consideration. A promised amount cannot be legally recovered where the
Promisee has done nothing on the basis of promise.

3. Example: -
If Mr. Shah promised to donate one lac for the repair of college. College
principal did nothing for repair. Mr. Shah refused to pay. On a suit by
principal it was held the Mr. Shah is not liable because it did not result
any loss to Promisee.
5. Case of Gift:-
In case of gift there is no need of any consideration. According the law
any gift which is actually delivered will be valid. It cannot be demanded
back on the ground that there was no consideration for him.
6. Extensionin Time Limit:-
There is no need of any consideration if agreement is made to extend time
for the enforcement of the contract.
Example: - Mr. Chun agrees to constructthe shop for Mr. Raju within one
year against Rs. 20 lac. Later on the request to Mr. Raju to extend the time
period for the completion of the shop. Mr. Raju accepts the request. It is a
valid agreement without consideration.
7. Case of Time Barred Debt:-
If a debtorpromises to pay a time barred debt, then there is no need of
consideration. The promise must be in written and signed by the debtor or
his agent.
8. Contractunder Seal:-
A contract without consideration is valid if it is made under seal.
Example: -
Mr. Nehru and Mr. Adit enter into agreement by writing the partnership deed
to form a partnership. This contract is valid.
Bailment
A bailment is a delivery of goods one person to another for some purpose
upon a contract that they shall be returned or otherwise disposed of

4. according to the directions of the persondelivering. The person delivering
the goods is called the "Bailor. The person to whom they are delivered is
called "Bailee".
Example: - Mr. John enters into agreement with Miss. Sony to deliver her
laptop to him on this condition that it shall be returned to her after one
month. In this example Mr. John is a Bailee and Miss. Sony is a Bailer.
Laptop is good bailed. It is a contract of Bailment.
Essentials orFeatures ofBailment
1. Contract
it is the basic essential for the bailment. For the delivery of goods contract
between the two parties is necessary. Contract may be oral or written,
implied or expressed.
2. Moveable Property:-
It is the main feature of bailment that it is only for the moveable property
and not for the immoveable property.
3. Delivery of Goods:-
It is also necessary that goods should be delivered by one person to another.
4. Change of Possession:-
Bailment contract also brings change in the possessions ofthe goods.
Only b without possessionis not sufficient for this contract.
5. Purpose of Bailment:-
The object of bailment may be for the safety of goods orfor hire or for the
use.
6. Temporary Delivery:-
The delivery of the goods may not be for the permanent purpose. It is
essential that delivery must be made for the temporary purpose.
7. Ownership:-
right of ownership remains with bailor and it does not change by the delivery
of goods to other person.

5. 8. Change in Shape:-
If bailed goods shape changes in the mean time even then it remains a
contract of bailment.
9. Parties of the Contract:-
In the contract of bailment there are two parties, the bailor and the bailee.
10. Returnable:-
It is very important feature of the bailment. The bailee should return the
goods to the bailer or disposed according the directions of the Bailer.
Rights and Duties of Bailer
Rights of Bailer
1. If bailee does not take care and destruction of goods takes place,
bailer can claim compensation.
2. If bailee uses the goods for un-authorized purposes, bailer has the
right to claim compensation.
3. Bailer has the right to claim return of goods.
4. Bailer has right to claim not only delivered goods but also accruals
on goods if any.
5. In case where bailee has mixed the goods and they are of sufferable
nature, bailer can claim cost of separation from bailee.
6. In case where the goods are of insufferable nature, bailer has right
to claim compensation.
7. Bailer has right to repudiate the Contract of bailment whenever he
wants but, by doing so, if bailee comes across any suffering, bailer has to
compensate.
Duties of Bailer
Duty to dispose faults:
Bailer should disclose faults present in goods at the time of making
delivery. Faults are of two types namely; Known faults and Un-known
faults. On the other hand bailment also is of two type’s namely gratuitous
bailment and Non-Gratuitous bailment. In case of gratuitous bailment,

6. bailer is liable to compensate for bailee injuries arising out of known
faults. In Gratuitous bailment, bailer is not answerable to un-known
faults. In case of Non-Gratuitous bailment, bailer is answerable to both
known faults and Un-known faults.
Duty to contribute for expenses:
Bailer should contribute for expenses incurred by bailee. In case of
Gratuitous bailment, bailer need not contribute for ordinary expenses and
extra ordinary expenses or to the contributed by bailer. In case of Non-
Gratuitous bailment, bailer should contribute for both ordinary expenses
and extra ordinary expenses.
Duty with regard to defective title:
In case where bailer has delivered the goods with defective title, the bailee may
come across suffering from the side of true owner due to bailer’s defective title.
In such a case bailer with defective title should compensate bailee.
Duty to Indemnify:
Principal of indemnity operates between bailer and bailee, where bailer becomes
implied indemnifier and bailee becomes implied indemnity holder. So bailer has
duty to indemnify bailee.
Duty to take the Goods back:
After fulfillment of purpose bailee returns the goods to bailer. Then bailer
should take them back. If bailer refuses to take the goods back, bailer has to
compensate bailee.
DUTIES or RESPONSIBILITIES or LIABILITIES of the BAILEE
Following are the liabilitiesof the bailee :
1. Care of Goods :-
It is the duty of the bailee that he should take as much care of the goods as a
man of ordinary prudence takes care about his own goods.
2. Act According The Bailment :-
Any act of the bailee should not be against the conditions of the contract.
Otherwise contract will be voidable at the option of the bailor.
3. Mixing is NotAllowed :-
It is the duty of the bailee that he should keep the bailor goods separate from
his own goods. If he mixed without the consent of the bailor then he himself

7. will bear the expenses of separation and loss.
4. Should NotDeny The Title :-
It is the duty of the bailee that he should not deny or change the title of the
bailor about the ownership of goods.
5. Default of Responsibility:-
It is the duty of the bailee that he should not deny or change the title of the
bailor about the ownership of goods.
6. Return of Goods:-
It is the duty of the bailee to return or deliver the goods bailed according to
the bailors conditions.
7. Return at ProperTime :-
It is the duty of the bailee that he should return the goods bailed as the time
or purposeof bailment completes without the demand of the bailor.
8. Return of Profit:-
It is also the duty of the bailee that he should deliver the profit or any
increase occurred in the bailed goods to the bailor.
9. Proper Use of Goods:-
It is the duty of the bailee that he should use the goods according the
conditions of the contract. If he misuses the goods then he will compensate
the loss to the bailor.
IMPORTANT RIGHT OF BAILEE:-
Following are the important right of bailee:
1. RecoveryofLosses :-
If the bailee suffers a loss or damage due to the defects of the bailed goods
he has a right to recover it from the bailor.
2. CompensationRight:-

8. It is the right of the bailee that he should received compensation from the
bailor for any loss which he has suffered due to defects in the title of the
bailor.
3. Right of Retain:-
Sometimes bailee performs some services for the purposeof bailment. In
such cases bailee has a right to detain such bailed goods until he receives the
reward of his services.
4. RecoveryOf Expenses:-
All the expenses incurred for the bailment may be recovered by the bailee
from the bailer.
5. Right of Indemnity:-
Any loss which bailee has sustained may recover from the Bailor on the
following grounds, "The bailer was not entitled to make the bailment, or
receive backthe goods, orto give directions in this respect.