Generally it is assumed that no consideration no contract. It means an agreement without consideration is no contract. It signifies that the contract without consideration is no a valid contract and consideration is essential element to form a valid contract but there are some certain exceptions to this rule. These exceptions provide validity to the contract without having consideration. Nepal Contract Act, 2056 has not mention any provisions about the exceptions relating to consideration. But section 25 and section 185 of the Indian Contract Act, 1872 has mentioned about the exceptions which are given below:

   a.  Natural love and affection:

An agreement without consideration is valid if it is based on natural love and affection. It is enforceable only if the following requirements are satisfied.

  • It is made by written document 
  • It is registered under the law.
  • It is made on account of love and affection.
  • The parties to it stand in a near relationship to each other.

Example: 'A' for natural love and affection promises to give his daughter 'B' Rs. 10 lakhs in to written and registered it. This is a valid contract, but there is no consideration for 'A'.

b.  Contract to pay time–barred debt:

 If a debtor makes promise to pay a time barred debt then he is obliged to pay such debt. The promise may be to pay whole or part of debt. According to Section 25(3) of Indian Contract Act, 1872 a promise to pay time barred debt without consideration is enforceable provided that:

  • It is promise to pay whole or part of the debt.
  • It is made in written 
  • It is signed by the debtor or by his agent, who generally or specially authorized for these purpose.
  • It relates to a debt which could not be enforced by creditor by limitation.

c.  Gift:

 The gifts actually made by a donor and accepted by the donee are valid even without consideration. According to Indian Contract Act, 1872 Section 25 a completed gift need not consideration. Nepal Contract Act is silent in this respect but the chapter of gift (Dan Bakas Ko Mahal) of Muluki Ain,2020 has made some provision under which a party can transfer his property to other as a gift without consideration.

d.  Agency:

 According to the Section 185 of Indian Contract Act, 1872 the consideration is no necessary to create an agency. There is no question of salary, reward or commission to agent. It is the matter between the appointer and appointee of an agent.

e.  Promise to compensate:

 Such promise made without consideration is valid if it is a promise to compensate. (Wholly or in partly) The person who is to be compensated has already done something voluntarily or has done something which the promisor was legally bound to do.

f.  Contribution to Charity:

 A promise to contribution to charity would be enforceable by law even without consideration. Example, 'A' has agreed to subscribe Rs. 1,000 toward the construction of a Town Hall at Patan. 'B' on the faith of the promise entrusted the work to a contractor and undertook liability to pay him 'A' was liable.