Eclipsed by Orthodoxy: The Vanishing Point of Consideration and the Forgotten Ingenuity of the Indian Contract Act 1872

Abstract

The definition of consideration in Section 2(d) of the Indian Contract Act 1872 substantially anticipated the far-reaching reforms to the orthodox doctrine of consideration that were proposed by the English Law Revision Committee (1937). These included making enforceable, through the doctrine of promissory estoppel, promises without consideration in the traditional sense that were meant to and did induce reliance; making enforceable a promise to perform a pre-existing duty; and making binding a promise to keep an offer open. The pivots of the definition in Section 2(d) were: a ‘subjective’ conception of consideration on which value was to be measured by the desire of the contractors alone, as opposed to an external standard; a concomitant purging of the traditional requirements of benefit and detriment; and the recognition of induced reliance as a form of consideration. The definition was designed to mark the vanishing point of consideration without having to formally abolish it. This design, however, went awry as courts and scholars in India projected the orthodox English model of consideration, replete with benefit and detriment, and external standards of value, upon this provision. Consequently, an ingenious piece of draftsmanship came to be eclipsed by orthodoxy.

Minors’ Contracts in the Digital Age

“…The Indian Contract Act, 1872 (ICA) is a progressive legislation that seeks to go beyond the constraints present within its source, the English common law. In several areas, be it consideration, communication of offers, or remission of performance, amongst many others, the rules embodied within the ICA are an improvement on the source material Swaminathan 2008 ; Swaminathan 2017 ; Swaminathan 2018 ). However, one area where this assertion does not hold is that of incapacity, specifically those agreements where one of the contracting parties is a minor.…”