Past, Present and Future Consideration under Section 2(d) of the Indian Contract Act, 1872: The Three Tenses of Consideration and Why Past Consideration Is Good in India

Section 2(d) is written in three tenses, and the choice was deliberate. Consideration may consist in something the promisee has done, in something he does, or in something he promises to do. English law recognises only the second and third; it treats a promise given after the act as a mere expression of gratitude for something already complete. The Indian draftsman rejected that view, and the divergence produces different answers to a range of everyday situations. This topic works through the three categories, the reasoning behind each, and the limits that apply even in India.

1. The Statutory Language

Section 2(d), Indian Contract Act, 1872

When, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise.

The three phrases correspond exactly to the three categories. 'Has done or abstained from doing' is past consideration. 'Does or abstains from doing' is present or executed consideration. 'Promises to do or to abstain from doing' is future or executory consideration. All three are declared to be consideration in the same sentence and on the same footing, so no question of comparative sufficiency arises between them.

2. Past Consideration

2.1 What it is

Past consideration is an act or abstinence completed before the promise was made, in return for which the promise is afterwards given. The structure is: A does something at B's request; the thing is finished; B then promises to pay for it. In India that promise is supported by consideration and is enforceable. The essential condition is unchanged: the act must have been done at the desire of the promisor. A past act done spontaneously, or at the request of a third party, is not past consideration at all, and a later promise to pay for it falls outside Section 2(d) altogether.

2.2 The English rule

📖 Re McArdle, [1951] Ch 669 (CA)

Facts: A house was left to a testator's children subject to a life interest in their mother. The wife of one of the children, living in the house, carried out substantial improvements and paid for them herself. After the work was complete, all the children signed a document addressed to her stating that in consideration of her carrying out the alterations they agreed that the cost should be repaid to her out of the estate. She sought to enforce it.

Held: The Court of Appeal held the document unenforceable. The work had been completed before the document was signed, so the consideration recited in it was wholly past. A promise given in respect of an act already performed is, in English law, gratuitous, and the document was no more than a voluntary undertaking without consideration.

Ratio: In English law past consideration is no consideration. A promise made after the act is complete is unsupported, whatever the document recites.

2.3 The English exception, and why India does not need it

📖 Lampleigh v. Brathwait, (1615) Hob 105

Facts: The defendant, having killed a man, asked the plaintiff to ride to the King and obtain a pardon for him. The plaintiff did so at his own expense and trouble. Afterwards the defendant promised to pay him one hundred pounds for the service. He did not pay, and the plaintiff sued.

Held: The promise was enforceable. Although the service was past, it had been rendered at the defendant's request, and the request and the subsequent promise were to be treated as part of a single transaction. A service performed at the promisor's request in circumstances where payment was plainly contemplated raises an implied promise to pay, and the later express promise fixes the amount.

Ratio: Where a past act was done at the promisor's request in circumstances importing an understanding that it would be paid for, a subsequent promise to pay is enforceable. This is the principal common law exception to the rule against past consideration.

Lampleigh v. Brathwait had to be reasoned as an exception in England. In India it needs no special treatment, because Section 2(d) covers it directly: the service was rendered at the promisor's desire, and what the promisee has done is consideration in terms of the section. The Indian rule is therefore both simpler and wider than the English rule plus its exception.

2.4 Past consideration and past voluntary service compared

Two provisions deal with acts completed before the promise, and they cover different ground. The distinguishing question is whether the promisor asked for the act.

	Past consideration under Section 2(d)	Past voluntary service under Section 25(2)
Was the act requested?	Yes. It was done at the desire of the promisor	No. It was done voluntarily, without any request
What supports the promise?	The past act itself, which is consideration within the definition	Nothing. The promise is without consideration, and the exception validates it
Form required	None. The ordinary rules apply	None prescribed by the exception, though the promise must be proved
Additional conditions	Only that the act moved at the promisor's desire	The act must have been done for the promisor, or be something he was legally compellable to do, and he must have been in existence and competent when it was done
Relationship	The rule	The exception, which catches what the rule cannot reach

3. Present or Executed Consideration

Present consideration is furnished at the moment the contract is made. The promise and the act are simultaneous, so that one party performs at the instant of contracting and the contract is executed on his side from the outset. A cash sale over a counter is the standard example: the buyer's payment is the consideration for the seller's promise to transfer the goods, and it is made at the same moment.

Two points of practical importance follow. First, present consideration is commonly found in unilateral contracts, where the offeree accepts by performing the act called for; the performance is simultaneously the acceptance under Section 8 and the consideration under Section 2(d). Second, the party who has furnished present consideration is in a stronger procedural position on breach, because his claim is for the agreed sum as a debt rather than for damages requiring proof of loss.

4. Future or Executory Consideration

Future consideration is a promise given in return for a promise. Neither party has performed at the moment of contracting, and each is bound to the other by his undertaking. This is the form in which almost all commercial contracts are made, and Section 2(e) is written for it: every promise and every set of promises forming the consideration for each other is an agreement.

Both parties are bound from the moment of acceptance. Neither can withdraw on the ground that nothing has yet been done.
Sections 51 to 58 on reciprocal promises govern the order of performance. Where the promises are mutual and dependent, neither party need perform unless the other is ready and willing; where they are concurrent, performance must be simultaneous.
The promise must itself be real. A promise that leaves the promisor free to perform or not as he chooses is illusory and is no consideration, because it commits him to nothing.
A promise to perform an existing obligation is not good consideration, whether the obligation is imposed by law or owed under a subsisting contract with the same promisor.

5. The Three Categories Compared

	Past	Present or executed	Future or executory
Timing relative to the promise	The act is complete before the promise is made	The act is done at the moment the promise is made	The act is to be done after the promise
Statutory words in Section 2(d)	Has done or abstained from doing	Does or abstains from doing	Promises to do or to abstain from doing
Position in India	Good consideration	Good consideration	Good consideration
Position in England	Not consideration, subject to the exception in Lampleigh v. Brathwait	Good consideration	Good consideration
Typical example	Services rendered on request, followed by a promise to pay	A cash sale; performance of the condition of a reward offer	An agreement to sell goods next month against payment on delivery

⚠ Past consideration is not the same as no consideration

The two are often confused, and the difference decides the case. Past consideration means something was done at the promisor's desire before the promise; in India this supports the promise under Section 2(d) and the ordinary rules apply. No consideration means nothing moved at the promisor's desire at any time; the agreement is then void under Section 25 unless it falls within an exception. A claimant should therefore plead the request first, because establishing it converts the claim from one depending on a statutory exception into an ordinary contractual claim.

6. The Position Stated Shortly

Section 2(d) recognises consideration in all three tenses, and places them on the same footing.
Past consideration is an act completed before the promise, and it is good consideration in India provided it was done at the promisor's desire.
English law rejects past consideration, per Re McArdle, subject to the exception in Lampleigh v. Brathwait for a service rendered at the promisor's request where payment was contemplated.
India needs no such exception, because Section 2(d) covers the requested past act directly.
Past consideration under Section 2(d) is distinct from past voluntary service under Section 25(2); the dividing line is whether the promisor requested the act.
Present or executed consideration is furnished at the moment of contracting, and is the form taken in unilateral contracts under Section 8.
Future or executory consideration is a promise for a promise, and is the form of almost all commercial contracts, governed as to performance by Sections 51 to 58.
In every category the consideration must be real, must move at the promisor's desire, and must not be the performance of an existing obligation.

7. Related Topics and Provisions

Topic or provision	Connection
Consideration under the Indian Contract Act	The definition and its essentials
Exceptions to the Rule of No Consideration	Section 25(2) and past voluntary services
No Consideration, No Contract under Section 25	What happens when nothing moved at all
Lawful and Unlawful Consideration	The further requirement that consideration be lawful
General Offer and Performance of the Condition	Present consideration in unilateral contracts
Section 2(d), Indian Contract Act	The three tenses of consideration
Section 2(e), Indian Contract Act	Promises forming the consideration for each other
Section 8, Indian Contract Act	Acceptance by performing the conditions of a proposal
Sections 51 to 58, Indian Contract Act	Reciprocal promises and the order of performance
Section 25(2), Indian Contract Act	Promise to compensate for a past voluntary act