Consideration is a fundamental concept in business law and contract law. It refers to something of value that is exchanged between parties in a contract. In a valid contract, each party must provide consideration to the other, meaning they must give up something of value or incur some legal obligation as part of the contract.

Consideration can take various forms, such as:

1. Money: Payment of a specific amount.

2. Goods: Transfer of tangible items.

3. Services: Performing a task or service.

4. Forbearance: Refraining from doing something you have the legal right to do.

Consideration is crucial because it demonstrates that the parties intend to create a legally binding agreement. Without consideration, a contract may not be enforceable in a court of law. It ensures that both parties receive something in exchange for their promise, making the contract fair and equitable.