Consideration

You agree to build a website for $5,000. Your consideration is the work. Their consideration is the money. Both sides give something up. If your uncle promises to give you his car for nothing — no conditions, no exchange — that's a gift, not a contract. It's not enforceable because there's no consideration from your side. Consideration doesn't need to be money. A non-compete clause works because the employee gets something in return — the job itself, a signing bonus, or continued employment. Courts will sometimes examine whether consideration is adequate, but in most jurisdictions they won't second-guess the value. A peppercorn can be valid consideration if both parties agreed to it freely. The key question is whether both sides exchanged something, not whether the exchange was fair. This is why contracts often open with the phrase 'in consideration of the mutual promises herein' — it signals that both sides are giving something up, satisfying this fundamental legal requirement.

In consideration of the mutual promises and covenants set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: The Client shall pay the Service Provider the sum of [Amount] in exchange for the Services described in Exhibit A.