What is required for consideration to be valid in a contract?

For consideration to be valid in a contract, it is necessary that it provides some value to both parties involved in the agreement. Consideration refers to what each party gives up to the other as part of the contract, which can take various forms—monetary or non-monetary. It is essential that this exchange is of value, as it establishes the basis for the contractual relationship and ensures that both parties are committed to the terms agreed upon.

Each party must have something to gain or lose for the contract to be binding. This mutual exchange differentiates a contract from a gift, where one party gives something without receiving anything in return.

While monetary exchange, written agreements, or approval from a legal authority can play roles in forming contracts, they are not necessary conditions for consideration. Consideration can be present without a written agreement, and the value exchanged does not have to be purely monetary. Similarly, approval from a legal authority is not typically required for private contracts unless specified by law for certain types of agreements.