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Eclipsed by Orthodoxy: The Vanishing Point of Consideration and the Forgotten Ingenuity of the Indian Contract Act 1872

  • Shivprasad SWAMINATHAN (a1)

The definition of consideration in Section 2(d) of the Indian Contract Act 1872 substantially anticipated the far-reaching reforms to the orthodox doctrine of consideration that were proposed by the English Law Revision Committee (1937). These included making enforceable, through the doctrine of promissory estoppel, promises without consideration in the traditional sense that were meant to and did induce reliance; making enforceable a promise to perform a pre-existing duty; and making binding a promise to keep an offer open. The pivots of the definition in Section 2(d) were: a ‘subjective’ conception of consideration on which value was to be measured by the desire of the contractors alone, as opposed to an external standard; a concomitant purging of the traditional requirements of benefit and detriment; and the recognition of induced reliance as a form of consideration. The definition was designed to mark the vanishing point of consideration without having to formally abolish it. This design, however, went awry as courts and scholars in India projected the orthodox English model of consideration, replete with benefit and detriment, and external standards of value, upon this provision. Consequently, an ingenious piece of draftsmanship came to be eclipsed by orthodoxy.

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Associate Professor, O.P. Jindal Global University, Sonepat, Delhi (NCR) India. This article owes its existence in more ways than one to Niranjan Venkatesan – the central ideas discussed here emerged and took shape in conversations with Niranjan and he also painstakingly commented on earlier drafts of the article. Many thanks are due to Prashant Iyengar and Rohan Alva for their discussions and encouragement; and the anonymous referees for pressing me to be clearer on some issues. I benefitted greatly from the use of the Bodleian Law Library, Oxford and the Library of the Max Planck Institute for Comparative and International Private Law, Hamburg.

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Asian Journal of Comparative Law
  • ISSN: 2194-6078
  • EISSN: 1932-0205
  • URL: /core/journals/asian-journal-of-comparative-law
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