Transfer of Property Act Section 127 — Onerous gifts
CHAPTER VII OF GIFTS
General
Summary
If a gift is given as one single package containing several items, and at least one of those items comes with a condition or burden, the person receiving the gift must accept the entire package, including the burden, or they get nothing at all. However, if the gift is made up of separate and independent transfers, the receiver can choose to accept some parts and reject others, even if the accepted part is good and the rejected part is burdensome. If a person who is not legally capable of making a contract accepts a gift that comes with an obligation, they are not bound by that obligation just by accepting it. But if they later become capable of contracting, learn about the obligation, and still keep the gifted property, they then become bound by it.
Official Text
Where a gift is in the form of a single transfer to the same person of several things of which one is, and the others are not, burdened by an obligation, the donee can take nothing by the gift unless he accepts it fully. Where a gift is in the form of two or more separate and independent transfers to the same person of several things, the donee is at liberty to accept one of them and refuse the others, although the former may be beneficial and the latter onerous. Onerous gift to disqualified person.—A donee not competent to contract and accepting property burdened by any obligation is not bound by his acceptance. But if, after becoming competent to contract and being aware of the obligation, he retains the property given, he becomes so bound. Illustrations
(a) A has shares in X, a prosperous joint stock company, and also shares in Y, a joint stock company, in difficulties. Heavy calls are expected in respect of the shares in Y. A gives B all his shares in joint stock companies. B refuses to accept the shares in Y. He cannot take the shares in X.
(b) A, having a lease for a term of years of a house at a rent which he and his representatives are bound to pay during the term, and which is more than the house can be let for, given to B the lease, and also, as a separate and independent transaction, a sum of money. B refuses to accept the lease. He does not by his refusal forfeit the money.