Important cases in which contract without consideration are valid are given below:
Cases
1. Love and affection (Sec. 25(1)):
Where an agreement is expressed in writing and registered under the law for the time being in force for the registration of the documents and is made on account of natural love and affection between the parties standing in near relation to each other.Such a contract is enforceable, even if there is no consideration.
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2. Compensation for voluntary services (Sec. 25(2)):
A promise to compensate wholly or in part, a person who has already voluntarily done something for the promisor is enforceable, even though there would be no consideration in such a promise. In other words, a promise to pay for past voluntary services is binding.
3. Promise to pay time-barred debt (Sec. 25(3)):
A promise by a debtor to pay a time- barred debt is enforceable that it is made in writing and is signed by the debtor or his agent generally or specifically authorised in that behalf. The promise may be to pay whole or a part of the debt.
4. Completed gifts (Explanation 1 to Sec. 25):
The rule, ‘No consideration, no contract’ also does not apply to gifts made and accepted (i.e., completed gifts). Gift, therefore, made without consideration is valid. Thus, consideration is not needed between donors and done.
5. Agency (Sec. 185):
No consideration is required between the principal and agent to create an agency.
6. Contract under seal:
Under the law, a contract made in the form of a deed under seal is valid even though it is made without consideration.