Section 25 of the Indian Contract Act, 1872: Agreement without consideration, void, unless it is in writing and registered, or is a promise to compensate for something done, or is a promise to pay a debt barred by limitation law

The provision

An agreement made without consideration is void, unless it is in writing and registered under the law for the time being in force for the registration of documents, and is made on account of natural love and affection between parties standing in a near relation to each other; or unless it is a promise to compensate a person who has already voluntarily done something for the promisor; or unless it is a promise to pay a debt barred by the law of limitation.

Indian Contract Act, 1872, Section 25. Official text.

What Section 25 means

Under Indian contract law, an agreement is generally void if one party gives nothing in return (no consideration). Section 25 carves out three narrow exceptions where a promise without consideration can be legally binding and enforceable.

The three exceptions that make a promise binding

Exception 1: Written, registered promise between close relations If a promise is made in writing, registered as required by law, and is based on natural love and affection between family members or those in a near relationship, it is enforceable even without consideration. "Near relation" typically means spouse, parent, child, or sibling, though courts have extended it in some cases. The registration requirement is critical. A mere written letter between relatives will not suffice; the document must be formally registered under the Registration Act, 1908.

Exception 2: Promise to compensate for past voluntary act If someone has already done something voluntarily for you (without being asked or promised payment), and you then promise to pay them, that promise is binding. For example, if a neighbour rescues your child from danger unprompted, and you later promise to give them Rs 100,000, that promise is enforceable. The act must be voluntary and completed before the promise is made.

Exception 3: Promise to pay a time-barred debt If a debt has become unenforceable because the creditor waited too long to sue (the limitation period expired, usually 3 years for simple contracts), a fresh promise by the debtor to pay it revives the creditor's right to recover.

Drafting and contract implications

Section 25 affects how you structure gratuitous promises and family agreements. If you want a family loan or gift to be legally binding, do not rely on verbal assurances. Draft it carefully: the document must be in writing and registered under the Registration Act. Without registration, a written family promise is still void.

For commercial contracts, this section reinforces that all material promises should be supported by consideration (payment, service, benefit, or detriment). If you receive goods or services without paying, and later promise to pay, ensure the promise is documented in writing with clear terms, as courts may scrutinise whether it falls within Exception 2.

When reviving time-barred debts, obtain an explicit written promise from the debtor restating the obligation. This fresh promise resets the limitation period. However, mere part payment does not revive a barred debt; a clear promise is needed.

Do not assume oral promises are binding between family members. Always formalise and register them if enforceability matters. For commercial suppliers or contractors, ensure every promise of payment or performance has a contractual basis with identifiable consideration, or document it separately as a registered family arrangement if applicable.

This page explains the law in general terms for information only. It is not legal advice. Always read the provision in its official source and take advice on your specific facts.