Principle Generally an agreement without consideration is not valid Therefore in order to make ...........

Indian Contract Act (ICA)1872 Consideration of Contract

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 old 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 lac 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 can not be said to be valid one.

William can cancel his agreement with Smith as the consideration involved in that is really inadequate.

William can not 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.

William can cancel his agreement with Smith as he was ignorant about the value / price of the car for which it could be sold.

William can cancel his agreement with Smith as he is entitled to get full market value/price of his car.

Explanation:

Although Smith's offer is negligible when it is compared with Anson's offer, however It does have a substantial value in the eyes of law and hence is a valid consideration. An agreement for 10,000 is less than the offer, but it is a validly entered agreement and is binding upon the parties.