What is consideration in contract law?

• A. The bargained-for exchange of value that supports a promise.
• B. Something given freely with no exchange.
• C. A form of contract breach.
• D. An offer that is accepted.

Answer: (A)

Consideration is the requirement that a contract rests on an exchange of value—something promised or performed in return for the other party’s promise. It must be a bargained-for exchange: each party gives up something of value as the price of the promise or act. The value can be money, a service, a forbearance, or a promise to do or refrain from doing something. If something is given freely with no exchange, it is a gift and not consideration, so it generally won’t support a contract. An offer that is accepted relates to how a contract is formed, not to the requirement of consideration. The description that best captures consideration is the bargained-for exchange of value that supports a promise.