Introduction. The Latin maxim Ex nudo pacto non oritur actio means “no action arises from a bare promise.” Under the Indian Contract Act, consideration is an essential element of a valid contract. Section 25 lays down the general rule that an agreement made without consideration is void. However, the Act recognises certain exceptional situations where a promise without consideration becomes enforceable.
General Rule — No Consideration, No Contract (Section 25)
As per Section 25, an agreement without consideration is void. The law requires consideration to ensure seriousness, fairness, and intention to create legal relations. Without consideration, a promise remains a moral obligation, not a legal one.
Exceptions to the General Rule (Section 25)
There are three statutory exceptions where an agreement without consideration becomes enforceable:
1. Promise Made on Account of Natural Love and Affection
- The parties must be in a near or close relationship.
- The promise must be made out of genuine love and affection.
- It must be in written form and registered.
Example: A father signs and registers a written document promising to give his son ₹50,000 — enforceable even without consideration.
2. Promise to Compensate for Past Voluntary Services
- Where a person has voluntarily done something for the promisor.
- Or did something the promisor was legally bound to do.
- A later promise to compensate becomes enforceable.
Example: A saves B’s goods from fire voluntarily. Later B promises to pay A — the promise is valid.
3. Promise to Pay Time-Barred Debt
- The debt must be one that a creditor could have recovered but for the law of limitation.
- The promise must be in writing and signed by the debtor.
Example: A written and signed promise to repay an old time-barred debt becomes enforceable.
Explanations under Section 25
- Explanation 1: A completed gift is valid even without consideration.
- Explanation 2: Inadequacy of consideration alone does not make an agreement void.
Supporting Points for Examination
- Section 25 is an exception to the necessity of consideration.
- Strict compliance with formalities (writing, signature, registration) is essential.
- Promises based on natural love and affection require proof of genuine relationship.
- Past voluntary service must be real and beneficial to the promisor.
Illustrations
- A brother signs and registers a written promise to support his sister — valid.
- A voluntarily repairs B’s damaged fence; B later promises payment — valid.
- A debtor signs a written promise to repay time-barred debt — enforceable.
Additional Detailed Discussion
Consideration serves as the foundation of contractual enforceability because it reflects mutual exchange. Without consideration, a promise is merely a voluntary act without binding force. The maxim therefore prevents courts from enforcing promises based solely on moral duty. Indian law, while adopting this principle, recognises that in certain socially significant situations—such as close family bonds, past benefits received, and acknowledgment of debt—equity demands enforceability even without present consideration.
In the exception of natural love and affection, courts have emphasised that the relationship must genuinely reflect harmony and closeness. Mere blood relation is not enough if the relationship is strained. Similarly, in cases of past voluntary services, it must be shown that the act was truly voluntary and done for the promisor’s benefit. For time-barred debts, the law requires a written and signed promise to prevent fabricated claims. These exceptions therefore uphold fairness while maintaining the general rule.
Overall, Section 25 strikes a balance between the rigidity of the consideration requirement and the need to give effect to genuine promises in special circumstances.
Conclusion: The maxim reflects the principle that consideration is essential for enforceability. However, Section 25 recognises three narrow exceptions where promises without consideration become binding. These exceptions ensure fairness and uphold genuine obligations.