Consideration: Past, Executed, and Executory

Introduction

Consideration is a fundamental requirement for a valid contract under the Indian Contract Act, 1872.
Section 2(d) explains that consideration may involve doing something, refraining from doing something, or promising to do something at the desire of the promisor.

Based on the time at which consideration is given, the law recognises three types of consideration: past, executed (present), and executory (future).

Meaning / Definition

Under Section 2(d) of the Indian Contract Act, 1872, consideration may arise when, at the desire of the promisor (person making the promise), the promisee or any other person:

• Has done or abstained from doing something – past consideration
• Does or abstains from doing something – executed (present) consideration
• Promises to do or abstain from doing something – executory (future) consideration

Thus, the Act recognises three types of consideration depending on when the act or promise occurs.

Modes or Types

Past Consideration

Past consideration exists when the act forming consideration was completed before the promise was made, but the act was done at the request of the promisor.

The act must have been performed because the promisor asked for it.

Example

A asks B to find his lost dog.
B finds the dog and returns it to A.
After this, A promises to pay B ₹100.

Here, B’s act of finding the dog was done earlier, before the promise to pay was made.
Therefore, the consideration is past consideration.

Past Services Voluntarily Rendered

If a person performs an act without the request of the promisor, it is considered voluntary service (service done without request).

Normally, such voluntary acts do not create consideration.

However, Section 25 of the Indian Contract Act provides an exception where a promise to compensate a person for voluntary services already performed may become enforceable if the conditions of the section are satisfied.

Example

If B finds A’s lost dog without any request from A, and later A promises to pay ₹100, the act was voluntary.

This situation may fall under the exception mentioned in Section 25.

Executed or Present Consideration

Executed consideration exists when one party performs his obligation at the same time the contract is formed.

The act of performing the task both accepts the offer and provides consideration simultaneously.

Example

A announces a reward of ₹100 to anyone who finds and returns his lost dog.
B finds the dog and returns it to A.

By performing the task, B has accepted the offer and provided consideration at the same time.

This is called executed consideration.

Executory or Future Consideration

Executory consideration exists when both parties make promises to perform their obligations in the future.

At the time of making the contract, neither party has yet performed their promise.

Example

A agrees to supply goods to B next month.
B promises to pay the price after receiving the goods.

Both parties promise future performance, so the consideration is executory (future) consideration.

Distinction / Comparison

Types of Consideration

Practical Example

A asks B to repair his house.

• If B already repaired the house earlier at A’s request, and A later promises payment → Past consideration
• If B repairs the house immediately after A offers payment → Executed consideration
• If A and B agree today that B will repair the house next week and A will pay after completion → Executory consideration

Summary

• The Indian Contract Act recognises three types of consideration.
• Past consideration occurs when the act was performed before the promise was made.
• The act must have been done at the request of the promisor.
• Executed consideration occurs when the act is performed at the same time the contract is formed.
• Executory consideration occurs when both parties promise to perform their obligations in the future.
• The classification is based on the timing of the act or promise forming consideration.