Consideration is a payment made by one party to another in exchange for the transfer of something of value. Several examples of consideration are as follows:
- Being granted shares in a business in exchange for providing unpaid services.
- Issuing title to a vehicle in exchange for legal services.
- Paying cash in exchange for a right of first refusal for real estate.
- Issuing a loan in exchange for a promise of principal repayment, plus interest.
If valuable consideration is not part of a contract, the contract can be declared invalid.