What does consideration in a contract refer to?

Consideration in a contract specifically refers to something of value that is exchanged between the parties involved. This could be money, services, or an object; essentially, it represents what each party stands to gain from the agreement. For a contract to be legally binding, there must be consideration to demonstrate that both parties are contributing something of value. This mutual exchange differentiates contracts from gifts, as a contract requires that each party give up something to receive something else in return. Therefore, the presence of consideration is critical to validating a contract and ensuring that it is enforceable in a court of law.