Which of the following is not an exception to the rule - No Consideration, No contracta)Compensation for involuntary servicesb)Love and affectionc)Contract of agencyd)GiftCorrect answer is option 'A'. Can you explain this answer?

Question

Answer

Compensation for involuntary services is not an example to the rule "No consideration No contract."
According to Section 25(2) of the Indian Contract Act 1872,the person who is to be compensated has already done something voluntarily or has done some thing which the promisor was legally bound to do.

Answer

Compensation for involuntary services is not an example to the rule ' No consideration, No contract'.

According to [Section 25(2)] of The Indian Contract Act, 1872, the person who is to be compensated has already done something voluntraily or has done something which the promisor was legally bound to do.

Answer

Explanation:

No consideration, no contract is a fundamental principle of contract law. Consideration refers to something of value that is exchanged between parties to a contract. It is a necessary element for the formation of a legally binding contract. However, there are some exceptions to this rule where a contract can be enforceable even without consideration.

The exceptions to the rule 'no consideration, no contract' are as follows:

a) Compensation for involuntary services:
Compensation for involuntary services is not an exception to the rule. It means that if a person performs a service against their will or without any expectation of compensation, they cannot later claim payment for that service. In order for a contract to be enforceable, there must be a mutual exchange of consideration between the parties involved. If one party is providing a service involuntarily, without any expectation of payment, there is no consideration and therefore no contract.

b) Love and affection:
Love and affection is an exception to the rule. In certain situations, contracts based on love and affection can be enforceable even without consideration. For example, a contract between family members or close friends may be enforceable based on the love and affection between the parties, even if there is no monetary consideration involved.

c) Contract of agency:
A contract of agency is an exception to the rule. In an agency relationship, the agent acts on behalf of the principal and is authorized to make decisions and enter into contracts on their behalf. In this case, the consideration is not necessary for the formation of a contract. The agent's authority to act on behalf of the principal is sufficient to create a legally binding contract.

d) Gift:
A gift is also an exception to the rule. A gift is a voluntary transfer of property or assets from one party (the donor) to another party (the donee) without any expectation of consideration in return. It is a selfless act and does not require consideration to make it legally binding. However, certain formalities may be required for a gift to be valid, such as delivery of the gift and acceptance by the donee.

In summary, the exception to the rule 'no consideration, no contract' is compensation for involuntary services. In all other cases, such as contracts based on love and affection, contracts of agency, and gifts, a contract can be enforceable even without consideration.

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