What is ‘consideration’ in a contract?

Consideration in a contract refers to something of value that is exchanged between the parties involved. It is one of the essential elements that forms a legally binding contract and ensures that both parties have an incentive to enter into the agreement. This can take various forms, including money, services, goods, or even a promise to refrain from doing something. The key aspect of consideration is that it establishes a mutual exchange which is necessary for a contract to be enforceable in a court of law.

The other choices do not accurately represent the concept of consideration. For instance, simply exchanging goods for services does not encompass the broader definition of consideration, which includes any value that can be traded, not just goods for services. Legal advice, while important, is not an element of consideration; rather, it pertains to the process of forming or executing a contract. A detailed account of business operations is unrelated and does not pertain to the exchange of value between the parties in a contractual context.