Question

Principle: Generally an agreement without consideration is not valid. Therefore, in order to make a valid agreement, some consideration which may have some value in the eyes of law, is essentially required.

Facts: William has an older car of which he makes seldom use. He voluntarily enters into an agreement with Smith to sell this car for rupees ten thousand. Thereafter one Anson approaches William and offers to buy that car for rupees one lakh as the car was one which Anson has been searching for long. Now, William wants to cancel his agreement with Smith and refuses to deliver the car to him saying that consideration price for the car promised by Smith is negligible and therefore, agreement with him cannot be said to be valid one.

Decide

• A. William can cancel his agreement with Smith as the consideration involved in that is really inadequate
• B. William cannot cancel his agreement with Smith as the sale of car for rupees ten thousand was voluntary and this price has some value in the eyes of law
• C. William can cancel his agreement with Smith as he was ignorant about the value/ price of the car for which it could be sold
• D. William can cancel his agreement with Smith as he is entitled to get full market value/ price of his car

Answer 1

The correct option is B William cannot cancel his agreement with Smith as the sale of car for rupees ten thousand was voluntary and this price has some value in the eyes of law

As per the principle mentioned in the question and also supported by the Indian Contract Act, $1872$ generally an agreement without consideration is not valid. In this case, William cannot cancel his agreement with Smith because the sale of car to Smith for $Rs.10000$ was a voluntary act and this price or consideration has some value in the eyes of law.