What is Consideration (in Contract Law)?

Consideration is what each side gives the other to turn a promise into a contract: money, goods, work, or a promise in return. The word has nothing to do with being considerate. Without an exchange there is no contract, which is why a pure promise of a gift usually cannot be enforced. The exchange must exist; it does not have to be a fair one.

Consideration is the legal name for what changes hands in a deal: each side must give something of value for a promise to bind. It can be money, an object, work, a return promise, or even giving something up. Courts once enforced an uncle's promise to pay his nephew for staying off alcohol and tobacco until 21, because the nephew surrendered a right he legally had. The rule exists as a filter. The law wants to enforce bargains, not casual generosity, so a promise with nothing coming back, a promised gift, is generally unenforceable until the gift is actually handed over. Two refinements do the most work in practice. First, courts check that consideration exists, not that it is adequate: a house can validly sell for one dollar, which is why contracts recite token payments. Second, past consideration is no consideration. A favour already done cannot be the price of a new promise, because the exchange must be struck as one bargain.

Consideration works like the rules of the lunch-table trade. Swap your cookie for their crisps and the deal is real: both sides gave, both sides got, and backing out afterwards is a scandal. Announce instead that you will simply give them your cookie tomorrow, and tomorrow you may change your mind; a one-way promise was never a deal, just niceness. Notice what the table never asks: whether the trade was fair. A sticker for a sandwich still counts. Something for something is what makes it binding, not something of equal size.