Which statement best defines consideration in contract law?

• A. Bargained-for legal benefit or detriment
• B. A gift
• C. A promise made without any exchange
• D. A past act that is always sufficient

Answer: (A)

Consideration in contract law is the bargained-for exchange that gives rise to enforceable obligations. It means something of value is exchanged as part of the deal, creating a legal benefit to the promisor or a legal detriment to the promisee. This can take the form of a promise, an actual performance, or forbearance from a right. Gifts don’t count because there’s no exchange at the heart of the agreement. A past act isn’t valid consideration because it wasn’t given in exchange for a current promise. The idea is that the promisor and promisee must trade something of value as part of forming the contract, even if that value is small.