The Consideration is one of the most essential elements of a valid contract. It is the foundation of an agreement on which valid contract may stand. To be converted an agreement in to contract, the consideration is necessary condition except some exceptions. Generally without consideration no contract is regarded as valid contract. Promises without something in return are not enforceable, such something is called consideration. A contract without consideration is not create legal obligations. Consideration may be made in the form of money, goods and promise to do something or providing service.
Definition of Consideration
Consideration means a promise made to perform or not to perform any work in consideration of performance or non-performance of any work prescribed in the proposal. Nepal Contract Act, Section 2(d).
According to Anson; "Consideration is something which should be valuable in the eyes of law".
According to Black's Law Dictionary; "Consideration is the price or goods which the parties to fulfill the promise mentioned in the contract".
The agreement is legally enforceable only when both the parties give something and get something in return. To get something in exchange of something or do any work is called consideration. Consideration is need not necessary be in cash but it must be lawful. It may an act or promise to do or not to do something.
Example: 'A' agrees to sell his car to 'B' for Rs. 10 lakhs. Car is consideration for B and 10 lakhs is the consideration for 'A'.
To convert an agreement into a contract, every agreement must be made with consideration. In return for promise one gets something and the other looses something such something is called consideration. It is also known as "quid pro quo" in Roman law.