1. Facts of the Case
- A lent a book to B for use.
- B promised to return the book one week before examinations.
- B failed to return the book even after A’s repeated demands.
- A filed a suit for breach of contract and claimed damages.
- B’s defence: He argued that there was no consideration, and hence no valid contract existed under the Indian Contract Act, 1872.
2. Issues in the Case
- Whether there existed a valid contract between A and B.
- Whether consideration is necessary for a valid contract in this situation.
- Whether the promise to return the book was legally enforceable.
- Whether A can claim damages from B for non-return of the book.
3. Legal Principles Covered
a) Essentials of a Valid Contract (Section 10, Indian Contract Act, 1872)
A valid contract requires:
- Offer and Acceptance
- Free Consent
- Competent Parties
- Lawful Consideration and Object
- Intention to Create Legal Obligation
Application:
- The transaction between A and B was a social or moral arrangement, not a commercial or legal contract.
- There was no consideration moving from A to B, nor any intention to create a legal obligation.
b) Consideration (Section 2(d) of the Indian Contract Act, 1872)
“When, at the desire of the promisor, the promisee or any other person has done or abstained from doing something, such act or abstinence or promise is called a consideration for the promise.”
- Here, A lent the book voluntarily; B’s promise to return it was gratuitous (without any quid pro quo).
- There was no benefit to B or detriment to A that can be considered consideration in law.
c) Absence of Consideration (Section 25 of the Indian Contract Act, 1872)
“An agreement made without consideration is void, unless it falls under certain exceptions.”
Exceptions under Section 25:
- Promise made out of natural love and affection (if in writing and registered).
- Promise to compensate a person for past voluntary service.
- Promise to pay a time-barred debt.
Application:
- The promise between A and B does not fall under any of the exceptions.
- Hence, it is void for want of consideration.
d) Intention to Create Legal Obligation
- In social or domestic arrangements, there is no presumption of legal intention.
- The borrowing of a book between friends is not a commercial transaction.
- Courts generally hold such agreements as unenforceable.
Case Reference:
- Balfour v. Balfour (1919) 2 KB 571:
Agreements of a social or domestic nature are not contracts as there is no legal intent. - Similarly, A’s act of lending a book to B is a friendly gesture, not a commercial transaction.
4. Possible Judgement
- There was no valid contract between A and B because the promise lacked consideration and intention to create legal obligations.
- Section 25 of the Indian Contract Act clearly states that an agreement without consideration is void, unless it falls within specific exceptions, which this case does not.
- Therefore, A cannot claim damages for breach of contract since no legally enforceable contract existed.
- However, A may request the return of the book based on ownership rights, but cannot claim contractual damages.
Judgement:
The agreement between A and B is void for want of consideration.
B’s plea is valid. A’s claim for damages cannot be sustained under contract law.
About lawgnan:
Understanding the concept of consideration is essential for determining whether an agreement is legally enforceable. At Lawgnan.in, we explain how social or moral promises differ from valid legal contracts under the Indian Contract Act, 1872. Learn when a promise without consideration becomes void, what exceptions apply, and how courts interpret intention to create legal obligations. Whether you are a law student, practitioner, or just curious about contract law, Lawgnan.in provides simplified explanations, case references, and expert insights to strengthen your legal understanding. Visit Lawgnan.in today to explore more about valid and void agreements.
