Correct option is C
Statement 1: Performance of a legal duty is no consideration for a promise (Correct)
· This statement is correct. The performance of an existing legal duty does not constitute valid consideration in contract law. If a person is already bound by law to perform a certain act, doing so cannot be considered as something of value exchanged in a contract.
· For example, if a police officer promises to recover stolen property in exchange for a reward, the officer is simply performing a legal duty, which cannot form the basis of consideration.
Statement 2: Forbearance to sue has always been regarded as valuable consideration (Correct)
· Forbearance to sue, or the act of refraining from exercising a legal right (like the right to file a lawsuit), is recognized as valuable consideration. Courts have consistently held that this is a valid form of consideration because it involves giving up a legal right in exchange for a promise.
· For instance, if one party agrees not to file a lawsuit in exchange for a sum of money, this promise is binding because the party is forgoing a right they would otherwise be entitled to.
Statement 3: It is not necessary that consideration should be adequate to the promise (Correct)
· According to Section 25 of the Indian Contract Act, 1872, it is not necessary for consideration to be adequate to the promise. This means that the courts do not evaluate whether the consideration is of equal value to the promise. The adequacy of consideration is a matter for the contracting parties to decide.
· As long as the consideration has some value in the eyes of the law, it is sufficient, even if it is nominal compared to the promise.
Information Booster:
Consideration in Contract Law:
· Section 2(d) of the Indian Contract Act, 1872 defines consideration as something that the promisor and promisee exchange, which may include acts, abstinence, or forbearance, as long as it has some value in the eyes of the law.
Forbearance as Valuable Consideration:
· Forbearance to sue, or a promise not to initiate a legal action, is recognized as consideration because the party giving up the right to sue is making a legal sacrifice.
Adequacy of Consideration:
· While the courts do not question whether the consideration is equal to the promise, they may intervene in cases of fraud, undue influence, or coercion, where the inadequacy of consideration may indicate an underlying issue.
