In order for a contract to be legally binding, it must contain certain elements, one of which is consideration. Consideration is defined as something of value that each party to the contract agrees to exchange. For example, if one party promises to provide goods or services in exchange for payment from the other party, the payment would be the consideration.
A consideration must be present in order for a contract to be valid and enforceable. If there is no consideration, then there is no contract. In other words, without something of value being exchanged between the parties, there is no legally binding agreement.
There are several types of consideration that can be used in contracts, including: money, property, services, or a promise to do or not do something. Consideration must be determined before entering into a contract so that both parties know what they are agreeing to exchange.