**Consideration**
**Definition**
Consideration is a fundamental concept in contract law referring to something of value exchanged between parties, which is necessary for a contract to be legally binding.
## Overview
In legal terms, consideration is the benefit or detriment that parties agree to exchange as part of a contract. It can take various forms, including money, services, goods, or a promise to act or refrain from acting. The presence of consideration distinguishes a contract from a mere promise or gift, ensuring that each party incurs a legal obligation.
## Importance in Contract Law
Consideration serves as evidence that parties have mutually agreed to the terms of a contract. Without consideration, a contract is generally unenforceable, as courts require proof that both parties have provided something of value. This principle helps prevent gratuitous promises from being legally binding.
## Types of Consideration
Consideration may be executed, where the promise is fulfilled immediately, or executory, where the promise is to be performed in the future. It can also be either tangible, such as money or goods, or intangible, such as a promise or forbearance.
## Exceptions and Variations
Certain contracts, such as those under seal or promissory estoppel, may not require consideration to be enforceable. Additionally, some jurisdictions recognize nominal consideration to validate contracts, even if the value exchanged is minimal.
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**Meta Description:**
Consideration is a key element in contract law involving the exchange of value between parties, essential for creating legally binding agreements. This article explains its role, types, and exceptions.