Consideration

Consideration is a fundamental concept of contract law in common law jurisdictions. Indeed, it is usually required to make a contract enforceable. In this context, consideration is a bargained-for exchange of benefits that is sufficient to make a promise legally binding. Simply put, consideration is the price one pays for the other party’s promise.

Consideration can take a number of forms: a promise, money, real or personal property, or the performance or non-performance of an act.

The essential elements of consideration are:

1. Bargained-for exchange
2. Mutual exchange — both parties must get something
3. Exchange must include something of value, so-called valuable consideration