Tuesday, April 21, 2009

Practical Problems_Contract Act_93

Vijay gifted the whole of his property to his daughter on the condition that she should pay Rs.200 per month to her uncle (father’s brother). Later, she refused to pay her uncle on the ground that she did not receive any consideration from her uncle. Is she justified?

That consideration can legitimately move from a third party is an accepted principle of law in India though not in England. In Chinaya vs. Ramaya (1881) A.Mad. 13.7., a mother, ‘A’ had made over certain property to her daughter with condition that the former’s brother should be paid annuity by the latter. The latter (i.e. the daughter) the same day executed the document agreeing to pay annuity accordingly but declined to pay after sometime. A’s brother sued A’s daughter. It was contended on behalf of A’s daughter, that there was no consideration from A’s brother and hence there was no valid contract. This plea was rejected on the ground that the consideration did flow from mother to daughter and such consideration from third party is sufficient to enforce the promise of daughter of ‘A’ to pay annuity to A’s brother. In the given case if Vijay’s daughter had made a promise to her uncle then she would be bound by the promise.

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