<P> An agreement must be supported by a lawful consideration on both sides . Essentials of valid considerations are </P> <Ul> <Li> It must move at the desire of the promisor . An act constituting consideration must have been done at the desire or request of the promiser . If it is done at the instance of a third party or without the desire of the promisor, it will not be good consideration . For example, "A" saves "B" 's goods from fire without being ask him to do so . "A" cannot demand payment for his service . </Li> <Li> Consideration may move from the promisee or any other person . Under Indian law, consideration may be from the promisee of any other person i.e., even a stranger . This means that as long as there is consideration for the promisee, it is immaterial, who has furnished it . </Li> <Li> Consideration must be an act, abstinence or forebearance or a returned promise . </Li> <Li> Consideration may be past, present or future . Past consideration is not consideration according to English law . However it is a consideration as per Indian law . Example of past consideration is, "A" renders some service to "B" at latter's desire . After a month "B" promises to compensate "A" for service rendered to him earlier . When consideration is given simultaneously with promise, it is said to be present consideration...For example, "A" receives Rs. 50 / - in return for which he promises to deliver certain goods to "B". The money "A" receives is the present consideration . When consideration to one party to other is to pass subsequently to the maker of the contract, is said to be future consideration . For example . "A" promises to deliver certain goods to "B" after a week . "B" promises to pay the price after a fortnight, such consideration is future . </Li> <Li> Consideration must be real . Consideration must be real, competent and having some value in the eyes of law . For example, "A" promises to put life to "B" 's dead wife, if "B" pay him Rs. 1000 / - . "A" 's promise is physically impossible of performance hence there is no real consideration . </Li> <Li> Consideration must be something which the promiser is not already bound to do . A promise to do something what one is already bound to do, either by law, is not a good consideration., since it adds nothing to the previous existing legal consideration . </Li> <Li> Consideration need not be adequate . Consideration need not be necessarily be equal to value to something given . So long as consideration exists, the courts are not concerned as to adequacy, provided it is for some value . </Li> </Ul> <Li> It must move at the desire of the promisor . An act constituting consideration must have been done at the desire or request of the promiser . If it is done at the instance of a third party or without the desire of the promisor, it will not be good consideration . For example, "A" saves "B" 's goods from fire without being ask him to do so . "A" cannot demand payment for his service . </Li> <Li> Consideration may move from the promisee or any other person . Under Indian law, consideration may be from the promisee of any other person i.e., even a stranger . This means that as long as there is consideration for the promisee, it is immaterial, who has furnished it . </Li>

Definition of contract according to indian contract act