Section 25 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 25 sets the general rule that an agreement made without consideration is void, then lists three cases in which such an agreement is nevertheless a contract: a written and registered promise on account of natural love and affection between near relations, a promise to compensate a person who has already voluntarily done something for the promisor, and a written and signed promise to pay a debt barred by limitation. Two Explanations follow.
An agreement made without consideration is void, unless (1) it is in writing and registered, and made on account of natural love and affection between parties standing in a near relation to each other; (2) it is a promise to compensate, wholly or in part, a person who has already voluntarily done something for the promisor, or something the promisor was legally compellable to do; or (3) it is a promise, in writing and signed by the person to be charged or his authorised agent, to pay wholly or in part a debt which the creditor might have enforced but for the law of limitation. In these cases the agreement is a contract.
The general rule and the three exceptions
The footnote records that the word "documents" was substituted for "assurances" by Act 12 of 1891. The text reads: "An agreement made without consideration is void, unless—".
| # | Exception | Formalities and conditions in the text |
|---|---|---|
| 1 | Natural love and affection | Expressed in writing and registered under the law for the time being in force for registration of documents; made on account of natural love and affection between parties standing in a near relation to each other |
| 2 | Promise to compensate | A promise to compensate, wholly or in part, a person who has already voluntarily done something for the promisor, or something which the promisor was legally compellable to do |
| 3 | Time-barred debt | A promise made in writing and signed by the person to be charged, or by his agent generally or specially authorised, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits |
The closing line says: "In any of these cases, such an agreement is a contract."
If you are recording a family arrangement, a gift of money, an acknowledgement of an old debt or a payment for work done earlier, our agreement drafting service can help you put it in a form that fits the exception you rely on.
Exception 1: natural love and affection
Three conditions are set out, all in the text:
- In writing and registered under the law for the time being in force for registration of documents.
- Made on account of natural love and affection.
- Between parties standing in a near relation to each other.
The section does not define "near relation" or list relationships. We do not add a list. For stamp duty and registration of such documents, see our guides.
Exception 2: compensating voluntary past acts
The promise is "to compensate, wholly or in part, a person who has already voluntarily done something for the promisor, or something which the promisor was legally compellable to do". There is no requirement of writing in this exception. It connects with the definition of consideration in section 2(d), which includes an act that "has done" at the desire of the promisor; see our article on section 2(d). Exception 2 deals with the case where the earlier act was done voluntarily, and the Act makes the later promise to compensate a contract.
Exception 3: time-barred debts
The promise must be:
- in writing;
- signed by the person to be charged, or by his agent generally or specially authorised in that behalf; and
- a promise to pay, wholly or in part, a debt of which the creditor might have enforced payment but for the law for the limitation of suits.
The words "wholly or in part" mean the promise may be for part of the debt. The Act's illustration shows this. The Limitation Act is mentioned only in the illustration; for its own rules, read that Act.
The two Explanations
Explanation 1. "Nothing in this section shall affect the validity, as between the donor and donee, of any gift actually made." So a gift actually made is not touched by the section.
Explanation 2. An agreement to which the consent of the promisor is free consent is not void merely because the consideration is inadequate; but the inadequacy of the consideration may be taken into account by the Court in determining whether the promisor's consent was free consent. Section 14 explains what makes consent not free; see our article on section 14.
The Act's own illustrations
- (a) A promises, for no consideration, to give B Rs. 1,000. Void (the general rule).
- (b) A, for natural love and affection, promises his son B Rs. 1,000, puts the promise in writing and registers it. A contract (exception 1).
- (c) A finds B's purse and gives it to him; B promises to give A Rs. 50. A contract (exception 2).
- (d) A supports B's infant son; B promises to pay A's expenses. A contract (exception 2).
- (e) A owes B Rs. 1,000, but the debt is barred by the Limitation Act; A signs a written promise to pay B Rs. 500 on account of it. A contract (exception 3).
- (f) A agrees to sell a horse worth Rs. 1,000 for Rs. 10, and A's consent was free consent. A contract, notwithstanding the inadequacy of the consideration (Explanation 2).
- (g) Same sale, but A denies that his consent was free consent. The inadequacy of the consideration is a fact the Court should take into account in considering whether it was.
A modern example (ours, not the Act's)
Latif promises his daughter Mira Rs. 2 lakh towards her business, out of love and affection, and says it is only a gift with nothing asked in return. If it is only an oral promise, it falls under the general rule: no consideration, so void. If Latif puts it into a written document and registers it, exception 1 applies: it is made on account of natural love and affection between parties in a near relation, and the Act says it is a contract.
Separately, Nandini ran errands for a neighbour's shop for a month without being asked. The shop owner later promises to pay her Rs. 5,000 for it. That is a promise to compensate someone who has already voluntarily done something for the promisor, and exception 2 applies. And Omar owes a supplier an old debt on which the limitation period has run out. If he signs a written promise to pay part of it, exception 3 applies.
What can the parties change?
Section 25 sets the rule and its exceptions; the parties cannot agree that an oral promise without consideration will be binding. They can, however, choose to structure the arrangement so that it fits an exception (writing and registration for exception 1, a signed writing for exception 3), or supply consideration so that the agreement stands on its own. Explanation 1 leaves a gift actually made as it is.
Practical points
- Put gifts of promises in writing and register them if you want exception 1 to apply.
- Sign time-barred debt promises. Exception 3 requires a signed writing.
- Do not rely on oral promises of compensation without advice. Exception 2 has no writing requirement in the text, but proof matters.
- Do not assume low price means no contract. Explanation 2 says inadequate consideration alone does not make an agreement void where the promisor's consent was free consent.
Need help documenting a promise without a price?
If you are recording a family transfer, an acknowledgement of an old debt, or a payment for earlier help, our agreement drafting team can help you choose the right form and wording for it.
Key takeaways
- An agreement without consideration is void unless one of three exceptions applies (s.25).
- The exceptions are a written and registered promise for natural love and affection between near relations, a promise to compensate a voluntary past act, and a written, signed promise to pay a time-barred debt.
- A gift actually made is not affected (Explanation 1).
- Inadequacy of consideration alone does not make an agreement void if the promisor's consent was free consent (Explanation 2).
Read next
- Section 24: agreement void if unlawful in part
- Section 26: agreement in restraint of marriage
- Void and voidable contracts: sections 24 to 30
Disclaimer: Based on the text of the Indian Contract Act, 1872 as consulted on 1 October 2026. Many questions under this Act turn on case law and on the wording of the particular contract, which this article does not cover. It is general information, not legal advice; check the official text and take advice before acting.