Question

Raghav owes Murli Rs.10,000/-.This debt is time barred by the limitation Act. Even then Murli, promises in writing to pay Raghav R. 4,500/- on account of debt and signs the document. This contract is

• A. Enforceable
• B. Unenforceable
• C. Void
• D. None of the above

Hint:

Remember the three exceptions to the "no consideration, no contract" rule in Section 25: (1) Promise out of natural love and affection, (2) Promise to compensate for past voluntary services, and (3) Promise to pay a time-barred debt. These are frequently tested.

Answer 1

The Correct Option is A

Step 1: Understanding the Concept:
The question tests an exception to the general rule that an agreement made without consideration is void. Specifically, it deals with a promise to pay a debt that has become legally unenforceable due to the expiry of the limitation period (a 'time-barred' debt).
Step 2: Detailed Explanation:
The general rule is laid down in Section 25 of the Indian Contract Act, 1872: "An agreement made without consideration is void". However, the same section provides certain exceptions. \begin{itemize} \item Section 25(3) creates a specific exception for time-barred debts. It states that a promise to pay a debt barred by the law of limitation is a valid and enforceable contract if the promise is: \begin{enumerate} \item made in writing, and \item signed by the person to be charged (the debtor) or his authorized agent. \end{enumerate} \end{itemize} In the given scenario: \begin{itemize} \item There is a time-barred debt. \item Murli (the debtor) makes a promise to pay a part of it (Rs. 4,500). \item The promise is in writing. \item Murli signs the document. \end{itemize} All the conditions of Section 25(3) are fulfilled. Therefore, the new promise to pay Rs. 4,500 constitutes a valid and enforceable contract, even though there is no new consideration for it.
Step 3: Final Answer:
This contract is Enforceable.