What is meant by consideration ?
Consideration means “something in return” or “price paid by one party for promise of other”
Consideration can also be defined as:
“Something of value given by both parties to a contract that induces them to enter into the agreement to exchange mutual performances”.
Consideration is an essential element for the formation of a valid contract which is in fact reward given or accepted in return for promise. It may consist of a promise to perform a desired act or a promise to refrain/avoid from doing an act that one is legally entitled to do such as "I will pay you $1,000 not to build a road next to my fence.".
An agreement without consideration is not valid and not enforceable by law. An agreement will only be enforceable by law, when both parties exchange for some benefits or rights and those benefits and rights are lawful.
Consideration is basically the exchange of something of value in return for the promise or service of the other party. For example, if A promises B movie tickets for B’s promise to mow his lawn, the movie tickets would be the consideration for the promise. B’s efforts at mowing the lawn would also be consideration.
In addition, the exchange must be “bargained for.” The exchange must be something that the parties agreed to prior to making the exchange. For example, B cannot suddenly mow A’s lawn and expect payment/reward unless A and B agreed that the exchange would be made. Otherwise, B mowing A’s lawn would be treated as a gift.
Contract promises which are not supported by consideration are generally not enforceable thus not valid. In fact, the requirement of consideration is what distinguishes a contract from a mere gift. If one party merely promises goods to another party without requiring them to do something in exchange, the transaction would be a gift and not a contract.
Contracts may become unenforceable for "failure of consideration" when the intended consideration is found to be worth less than...