Contracts & ExecutionQuestion 793 of 1605
Consideration in a contract is best defined as:
a.A good-faith deposit paid at signing
b.A bargained-for exchange in which each party gives up something of legal value
c.The contractor's careful thought before signing
d.The total dollar price stated in the agreement
Explanation
Consideration is the bargained-for exchange of legal value that induces each party to enter the contract; each side must give up a legal right or promise to do (or refrain from) something. It need not be money and is not merely the contract price. 'Careful thought' is a lay meaning of 'consideration' and is legally irrelevant. A deposit can be consideration, but consideration is the broader concept of a mutual exchange of value, not just a deposit.
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