Source: RTP,Jan20265 Marks
Back to Law List

Question Scenario

Abhimanyu, a businessman, lost his important documents at a crowded railway station. Ramesh, a passerby, voluntarily collected the documents and returned them safely to Abhimanyu without expecting any reward. A week later, impressed by Ramesh’s honesty, Abhimanyu wrote and signed a promise to pay him `50,000 as a reward. Later, Abhimanyu refused to pay, arguing that the act had already been performed voluntarily and therefore did not constitute valid consideration. Ramesh filed a case claiming that the promise was binding. Decide, under the Indian Contract Act, 1872, whether Abhimanyu is liable to pay.

Estimated Writing Time: 9 mins Try in Practice Mode

Suggested Answer

Section 2(d) of the Indian Contract Act, 1872 defines consideration as an act or abstinence done at the desire of the promisor, which has already been done, is being done, or is promised to be done by the promisee or any other person. Section 25(2) specifically provides that a promise made in writing and signed by the promisor to compensate a person who has voluntarily done something for the promisor is enforceable, even without fresh consideration. Thus, although the original act was voluntary, once a subsequent written promise is made, it becomes binding. In the present case, Ramesh voluntarily returned Abhimanyu’s lost documents. At that time, no enforceable contract existed because the act was not done at Abhimanyu’s request. Subsequently, Abhimanyu made a written promise to pay `50,000 to Ramesh as a token of appreciation. Later, Abhimanyu refused to fulfil his promise. Here, the promise made by Abhimanyu in writing to compensate Ramesh for past voluntary services is valid and enforceable. Therefore, Ramesh is entitled to receive `50,000 and Abhimanyu is legally bound to pay.

Exam Strategy Tip

When answering law questions in the CA Foundation exam, follow the "Provision -> Facts -> Conclusion" structure for maximum marks. Ensure to state the relevant sections where applicable to earn bonus marks from the evaluator.

Ready to Practice More Law Cases?

Test your knowledge under timed conditions in our dedicated Writing Practice Mode. Get a feel for the real exam pressure.

Enter Writing Practice