Exceptions to Agreement without Consideration Is Void under Section 25 Are

When it comes to contract law in India, one of the most important provisions is Section 25 of the Indian Contract Act, 1872. According to this section, an agreement made without consideration is void. However, there are some exceptions to this rule. In this article, I will explore those exceptions and explain how they work.

Before we dive into the exceptions, it`s important to understand what “consideration” means in the context of contract law. Consideration refers to something of value that is exchanged between the parties to a contract. This can take many forms, such as money, goods, services, or even a promise to do something in the future.

Now, let`s take a look at the exceptions to Section 25:

1. Natural Love and Affection

An agreement made out of natural love and affection is an exception to Section 25. This means that if there is a contract between family members, where no consideration is involved, it is still considered valid. For example, a father gifting property to his son without any money being exchanged.

2. Contract of Agency

A contract of agency, where a person agrees to act on behalf of another without any consideration, is another exception to Section 25. For instance, if someone agrees to represent an artist without any payment, it is considered a valid contract.

3. Time-Barred Debts

If a debt is time-barred, meaning that the deadline for payment has passed, and the debtor agrees to pay without any consideration, it is still a valid agreement. For example, if a person owes money to another, and the statute of limitations has expired, they can still agree to repay the debt without any consideration, and the agreement would be considered valid.

4. Completed Gifts

If a gift has already been given, and the person who has received the gift agrees to transfer the ownership to another without any consideration, it is a valid agreement. For instance, if a father gifts a car to his daughter, and she agrees to give it to her friend, without any money being exchanged, it is considered a valid contract.

5. Voluntary Services

Agreements for voluntary services are also an exception to Section 25. For instance, if a person offers to do community service without any payment, it is considered a valid contract.

In conclusion, while Section 25 of the Indian Contract Act, 1872, states that agreements without consideration are void, there are some exceptions to the rule. When it comes to agreements made out of natural love and affection, agency contracts, time-barred debts, completed gifts, and voluntary services, the absence of consideration does not necessarily make the agreement void. As a professional, it`s important to understand these exceptions and how they apply to contract law in India.


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