Question

Legal Principle: When, at the desire of the promisor, the promisee or, any other person had done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something,such act or abstinence or promise, is called a consideration for the promise.

Factual Situation: An old lady Laxmi Rani gifted her property to her own daughter Ramayya, with the direction to pay a certain sum of money annualu to Chinayya, her maternal uncle. On the same day, Ramayya executed an agreement with Chinayya agreeing to pay the amount annually. Later on, Ramayya refused to honour the agreement on the ground that there is no consideration. Chinayya sued for the recovery of the annuity.

Issue : What is the nature of the contract?

• A. There was sufficient consideration,i.e., the property was given to her by the sister of Chinayya, So Ramayya was liable to pay.
• B. There was no agreement between Chinayya and Ramayya so Ramayya is not liable.
• C. There is no contract.
• D. None of these.

Answer 1

The correct option is A There was sufficient consideration,i.e., the property was given to her by the sister of Chinayya, So Ramayya was liable to pay.

One of the Essential elements of valid consideration is, consideration can be moved by promisee or any other person, here Chinayya will be entitled to maintain suit because a consideration need not necessarily move from the promisee (chinayya), it moved from any other person (I.e. the old lady Laxmi Rani) in this case. Here the consideration had moved from the old lady Laxmi Rani the mother of Ramayya and she was liable to pay the amount to chinayya therefore in India a stranger to consideration can sue but a stranger to the contract cannot.