In contract law, consideration is the value that each party to a contract gives up in exchange for the other party’s promise. Consideration is often referred to as “consideration of the contract” or simply “consideration.”
Consideration can be any item or service of value that one party promises to give another in exchange for something of value from the other party.
For example, if you agree to paint your neighbor’s house in exchange for $500, your neighbor’s promise to pay you $500 is a consideration because it was given in exchange for your agreement to paint his home. In many cases, consideration is money paid for goods or services rendered by one person or entity to another person or entity.