CA Foundation Exam > CA Foundation Questions > Which of the following statement is true?a)Co...
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Which of the following statement is true?
- a)Consideration must result in a benefit to both parties.
- b)Past consideration is no consideration in India.
- c)Consideration must be adequate.
- d)Consideration must be something, which a promisor is not already bound to do.
Correct answer is option 'D'. Can you explain this answer?
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Most Upvoted Answer
Which of the following statement is true?a)Consideration must result i...
Consideration must not be the performance of an existing duty. Hence the performance of an act by a person who is legally bound to perform the same cannot be consideration for a contract.
Ex. A promise to pay money to a witness is void, for it is without consideration.
Ex. A promise to pay money to a witness is void, for it is without consideration.
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Which of the following statement is true?a)Consideration must result i...
Explanation:
In contract law, consideration refers to something of value that is exchanged between the parties to a contract. It is an essential element for the formation of a valid contract. Consideration can take the form of a promise, an act, or a forbearance.
Option 'D' states that consideration must be something which a promisor is not already bound to do. This statement is true because consideration must involve a bargained-for exchange between the parties. It means that the promise or act given by one party must be given in exchange for the promise or act of the other party. If a person is already legally obligated to perform a certain act, then the promise to perform that act does not constitute valid consideration.
Example:
Suppose A promises to pay B $1000 for painting A's house. B is not legally obligated to paint the house, and A is not already bound to pay B. In this case, A's promise to pay $1000 is valid consideration for B's promise to paint the house.
Counterexamples:
If A is already legally obligated to pay B $1000 for painting the house, then A's promise to pay $1000 does not constitute valid consideration. Similarly, if B is already legally obligated to paint the house, then B's promise to paint the house does not constitute valid consideration.
Other options:
- Option 'A' states that consideration must result in a benefit to both parties. This statement is not true because consideration does not need to be of equal value for both parties. It is sufficient that each party receives some benefit or suffers some detriment as a result of the contract.
- Option 'B' states that past consideration is no consideration in India. This statement is not true because past consideration can be valid consideration if it was given at the request of the promisor and was intended to be remunerated.
- Option 'C' states that consideration must be adequate. This statement is not true because consideration does not need to be of equal value. As long as there is some value exchanged between the parties, it is sufficient for consideration.
In contract law, consideration refers to something of value that is exchanged between the parties to a contract. It is an essential element for the formation of a valid contract. Consideration can take the form of a promise, an act, or a forbearance.
Option 'D' states that consideration must be something which a promisor is not already bound to do. This statement is true because consideration must involve a bargained-for exchange between the parties. It means that the promise or act given by one party must be given in exchange for the promise or act of the other party. If a person is already legally obligated to perform a certain act, then the promise to perform that act does not constitute valid consideration.
Example:
Suppose A promises to pay B $1000 for painting A's house. B is not legally obligated to paint the house, and A is not already bound to pay B. In this case, A's promise to pay $1000 is valid consideration for B's promise to paint the house.
Counterexamples:
If A is already legally obligated to pay B $1000 for painting the house, then A's promise to pay $1000 does not constitute valid consideration. Similarly, if B is already legally obligated to paint the house, then B's promise to paint the house does not constitute valid consideration.
Other options:
- Option 'A' states that consideration must result in a benefit to both parties. This statement is not true because consideration does not need to be of equal value for both parties. It is sufficient that each party receives some benefit or suffers some detriment as a result of the contract.
- Option 'B' states that past consideration is no consideration in India. This statement is not true because past consideration can be valid consideration if it was given at the request of the promisor and was intended to be remunerated.
- Option 'C' states that consideration must be adequate. This statement is not true because consideration does not need to be of equal value. As long as there is some value exchanged between the parties, it is sufficient for consideration.
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Which of the following statement is true?a)Consideration must result in a benefit to both parties.b)Past consideration is no consideration in India.c)Consideration must be adequate.d)Consideration must be something, which a promisor is not already bound to do.Correct answer is option 'D'. Can you explain this answer?
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Which of the following statement is true?a)Consideration must result in a benefit to both parties.b)Past consideration is no consideration in India.c)Consideration must be adequate.d)Consideration must be something, which a promisor is not already bound to do.Correct answer is option 'D'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Which of the following statement is true?a)Consideration must result in a benefit to both parties.b)Past consideration is no consideration in India.c)Consideration must be adequate.d)Consideration must be something, which a promisor is not already bound to do.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following statement is true?a)Consideration must result in a benefit to both parties.b)Past consideration is no consideration in India.c)Consideration must be adequate.d)Consideration must be something, which a promisor is not already bound to do.Correct answer is option 'D'. Can you explain this answer?.
Which of the following statement is true?a)Consideration must result in a benefit to both parties.b)Past consideration is no consideration in India.c)Consideration must be adequate.d)Consideration must be something, which a promisor is not already bound to do.Correct answer is option 'D'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Which of the following statement is true?a)Consideration must result in a benefit to both parties.b)Past consideration is no consideration in India.c)Consideration must be adequate.d)Consideration must be something, which a promisor is not already bound to do.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following statement is true?a)Consideration must result in a benefit to both parties.b)Past consideration is no consideration in India.c)Consideration must be adequate.d)Consideration must be something, which a promisor is not already bound to do.Correct answer is option 'D'. Can you explain this answer?.
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