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In English law if other than the promise provide consideration, then the promise
could not be enforce by the law. This problem usually may arise when third party
involve. Consideration is an agreement without a valid consideration is void unless
they belong to one of those categories of agreement listed in the same section as
being exempted from the rule.
Under section 2(d) Contract Act 1950, when at the desire of the promisor, the
promise 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. It refers to what one
party to an agreement is giving or promising in exchange for what is being given or
promised from the other side.
Consideration is something which has a value in the eyes of law and it becomes
the basis of the contract. It is a ‘price’ which is paid by one party in return to a promise
/ act done by another party. This price may be an act or abstinence or a promise to
perform a future act or abstinence.
According the fact and synopsis of case, Bariam Singh as defended owed
Kerpa Singh as plaintiff, RM8.869.94 under the judgement debt. The debtor’s son
wrote a letter to Kerpa Singh, offering RM4000 in full satisfaction of his father’s debt
and endorsed a cheque for the amount, stipulating that should Kerpa Singh refuse to
accept his proposal, he must return the cheque. Kerpa Singh’s legal advisor having
cashed the cheque and retained the money, proceeded to secure the balance of the
debt by issuing a bankruptcy notice to the debtor.
During court held, the acceptance of the cheque in full satisfaction precluded
them from claiming the balance. The act of promise / creditor by accenting the
smaller sum of cheque will waive the performance of promise that made to him.
Under Section 64 Contract Act 1950, “Every promise may dispense with or
remit, wholly or in part, the performance of the promise made to him, or may extend
the time for such performance, or may accept instead of it any satisfaction which he
thinks fit. According to the Case between Bariam singh vs Kerpa singh, we known
Bariam owed debt about RM8, 869. 94 from Kerpa singh. Bariam’s son wrote a letter
to Kerpa offering $4000 in full satisfaction of his father’s debt. Bariam’s son endorsed
a cheque for the amount stipulating that if Kerpa refused to accept his offer, Kerpa
must return the cheque. Kerpa Singh’s legal adviser, having cashed the cheque and
retained the money, proceeded to secure the balance of the debt by issuing a
bankruptcy notice on the debtor. However at the end of case, bariam son won the case
and the whole debt is discharged.