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the second requirement for the formation of a contract in addition to an agreement between the parties is consideration consideration is one of the key concepts of contract law it is an essential element needed to make a contract legally binding it is also unique in that it doesnt exist in this form in civil law jurisdictions so what is consideration consideration is provided if something of legal value is bargained for and exchanged between the parties that is each side to a contract needs to provide consideration consideration can consist of various things the most common consideration is money thats what happens for instance when you purchase an item in a store and use cash or a credit card to pay for it it can also be an object so instead of paying in cash for a purchase you can give a valuable item to the other party next consideration can consist of a service that a party provides for example instead of paying for an item using cash you provide legal consultancy services in exc
