Valuable Consideration With Respect to Currie v. Misa Case

This Blog is inscribed by Nitish Pattanaik.

We know that in the case of a contract law consideration is necessary as an essential part to enter into any kind of agreement and contract. It is one of the main parts in the case of contract law. The sufficient consideration formation is quite complicated. In this case, the courts and legal offices use the term valuable consideration to put the light on the sufficient consideration. 

Normally the consideration is made up of a promise to perform an act that is wanted or a promise to refrain from a task doing it in a legal way. This is generally happening in case if a man asks for a promise over some goods or deals where profit is mainly involved.^[1]

According to section 2(d) of the Indian Contract Act, it is mentioned about the want of a promisor and the promisee and another person who all abstains from doing these tasks and these types of tasks can be termed as the Consideration for a promise.

The main requirements of a valid consideration which works regarding this work are-

1. The consideration should always work and move at the want of promisor. 
2. The consideration can shift from the promisee to any other person. 
3. It should be valuable in the legal context and eye of law
4. It should not be illegal 
5. The principle of promissory estopple should be there  
6. It should be away from the promisor’s existing obligation. ^[2]

Currie v. Misa | Case Study

Facts of the Case

Here, in this case, we notice a landmark law that helped and changed the perspective of the Contract Law. There was a company named Lizardi & Co. It used to exchange a number of bills to Mr. Misa. They used to withdraw from a bank whose owner was Mr. Currie and then they use to pay. Lizardi’s company was also in debt to Mr. Currie’s Bank. 

They have forced the payment for the debt they took. After some days while the payment was done in cheque Mr Misa found that Lizardi’s halted the payment, then informed the bankers not to honour the cheque.

 Now the main question was raised whether the cheque was payable or not. There were certain conditions about the sale of existing deeds simultaneously and sufficient consideration for security. As Mr. Currie was the holder of the cheque who should pay it.

Issues Raised

The main issue which was raised in this case was that whether the existing debt is enough sufficient to be considered for the security legally for the creditor

Judgement

After going through the facts and proper details the court decided that the Consideration should be constituted either for some right, proper interest, profit to any of the one-party and loss, suffering for the other party. 

So, their contract can be formed until and unless consideration was in the form of any benefits gained or any agreement which is suffered by the parties.

The court further held that the name of the creditor on negotiable security on an account with existing debt to be transferred to him. And there is no need for any kind of notice of infirmity of title by the debtor and it is considered inevitable. 

The pre-existing debt will not be considered as negotiable security and there is no consideration or any kind of payment in the form of a cheque by Mr. Misa.^[3]

Analysis

From the above-mentioned case, we understand what actually the consideration is and how it is dealt with the legal context. The consideration plays an important role in this case as it is mainly dealt with it. The terms and context which were used in this case indeed laid down a landmark judgement that helped the cases like this in near future. This case relates to the completion of consideration and how consideration should properly function. 

The main ingredients of an essential consideration were not noticed in this case and the useful elements like the promise were not noticed here. Further, we notice that about the securities and how work in reality. The term might be helping and we hear it every day but from here we see and further notice that how it is properly used and how it is made into work properly. All these things not only put an impact on a case but has the power to change it completely. We further analyzed about the pre-existing debt and notice of infirmity which we could see clearly how it works in the case of valuable consideration. 

The importance of timely payment is noticed here and we see how one can sue the following party regarding this. So, at the end, we can say that this case surely helped many landmark judgements of the valuable consideration and it will not be wrong if we call this case one of the important cases in the History of the Contract Act. 

 In Durga Prasad v. Baldeo, the plaintiff built some shops in the marketplace with the order of collector on that area. The defendants occupy the shops with the consideration of the plaintiff to increase construction and finance the shops. They promised the plaintiff to pay the amount as a certain commission once the goods were sold in the market. It was held that the commission will not be given to the plaintiff.^[4]

As the defendant’s desire was not the reason to constitute the consideration and this act was held not as a promise but collector’s order. On the other side as this act done by the plaintiff is not a promise, the promise doesn’t put any personal importance to the plaintiff, it is only a good consideration.  

In Kedarnath Bhattacharjee v. Gorie Mahomed; it was noticed that there was a town hall in Howrah which needed certain upgrades for this purpose the municipality decided to obtain public funds and public subscription. As the mentioned subscription was noted, the plaintiff entered into a contract with the contractor for the establishment of the act. As the defendant was a subscriber to this fund, he entered his name and Rs100 in the subscription book and he failed to pay the amount giving the reason that there was no consideration for the promise he made. He was held liable as the people who subscribed had knowledge of the act what they were doing and the payment to the contractor will also be done.^[5]

If we will talk about the legal provisions then; 

Section 2(d) in The Indian Contract Act, 1872 states that with the want of a promisor, the other person which may be promised has committed or restrained from doing, or makes promise to stop from doing, all these acts will be termed as consideration for the promise.^[6]

Section 25 in The Indian Contract Act, 1872 states that the agreement will be considered as a void agreement if it is done without any consideration. Only if it was in written form and registered or is done for any kind of compensation or any kind of promise according to the limitation law. 

1. The words expressed in writing and registered as per the law with the mentioned period of time and which is made under natural love and affection. 
   1. It will be considered as a promise if partly or fully a person has done something to the promisor for which he is legally compellable. 
   1. It will be considered as a promise if it is in the form of writing and signed by the person who is to be charged or his agent for the payment either fully or partly for which the creditor may be enforced with payment in case of law for suits, but in other cases it will be a contract.^[7]

Conclusion

As we all know the consideration term was mentioned under the Indian Contract Act, we can see it under section 2 and section 25 of the Indian Contract Act. The consideration plays an important role in the Contract Law. The Contract Law also provided the significant term which should be studied carefully in order to understand this particular thing. It also helps in understanding the important terminologies and several rules which were laid out and various essential things that we notice are completely mentioned under the sections in this Act. 

The consideration commonly plays an essential element for the competition of any contract. The consideration can be further categorized into many kinds and each one of them plays their roles in respecting them by making the consideration an essential ingredient of contract law in India. 

If we will talk about the valuable consideration, then the valuable consideration can be considered as a key element and it has a sole purpose. This consideration varies from case to case and it changes accordingly. We can say one thing, this valuable consideration indeed needs to be updated on more provisions are needed to be added. 

In the modern complicated world where we notice that there have been huge changes in everything so did the business is changing. For this reason, the complexities are increasing day today. All these problems might increase with the development and advancement of technologies. For all these specific reasons there is a strong need to add more provisions and rules regarding the valuable consideration so that it might not create problems afterwards. 

^[1] Valuable Consideration; Legal Dictionary

 https://legal dictionary.thefreedictionary.com/Valuable+Consideration.

^[2] Mariya Paliwal; Consideration and Promissory estoppel under Indian Contract Act, 1872; IPleaders; January 3 2020; https://blog.ipleaders.in/consideration-and-promissory-estoppel/#:~:text=A%20consideration%20to%20be%20valid%20under%20Section%202,be%20made%20in%20the%20past%2C%20present%20or%20future.

^[3] (1874) LR 10 Ex 153. 

^[4] Durga Prasad v. Baldeo and Ors, [1881] ILR 3 ALLAHABAD 22.

^[5] Kedarnath Bhattacharji v. Gorie Mahomed, (1886) ILR 14 Cal 64.

^[6] Indian Kanoon; Central Government Act; Section2(d) in the Indian Contract Act, 1872; 

https://indiankanoon.org/doc/877630/#:~:text=Section%202%20%28d%29%20in%20The%20Indian%20Contract%20Act%2C,promise%20is%20called%20a%20consideration%20for%20the%20promise%3B.

^[7] Indian Kanoon; Central Government Act; Section-25 in the Indian Contract Act, 1872; https://indiankanoon.org/doc/1903729/.