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shonith (Law Officer)     25 June 2009

consideration in an Agreement

Whether an agreement  between a Manufacturer and a Distributor is valid,

if the said document contains only mutual rights and obligations to be

performed by both parties and also it ldoes not contain any monetary

consideration from one party to another.

Whether monetory consideration is necessary or any other

non-monitory consideration is enough for an agreement ot be valid?


 3 Replies

N.K.Assumi (Advocate)     25 June 2009

See sec 25 of the Indian Contract Act. An agreement without consideration is void.

Swami Sadashiva Brahmendra Sar (Nil)     25 June 2009

Mr Assumi is right. However, Monetary consideration is not necessary. S 2 (d) defines consideration as doing something or abstaining from doing something at the desire of other party.

shonith (Law Officer)     26 June 2009

Dear All,

Thanks for the timely advice


Shonith P S

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