Consideration Law Contract Definition

Consideration is an English common law concept, it is the central element in the making of a contract. Without consideration, a contract cannot exist. The courts have set out several rules regarding what constitutes valid consideration. In order for something to be valid consideration, it must be:

* Sufficient – It must be of some value and inducement to the promisor

* Real – It must be capable of being enforced by law

* Possible – It must not be illegal or against public policy

* Mutuality of obligation – Both parties to the contract must be bound by the same terms