What aspect does 'consideration' refer to in contracts?

'Consideration' in the context of contracts refers to the value exchanged between parties involved in an agreement. This value can take many forms, including money, services, goods, or a promise to perform specific actions. It is a fundamental element required for a contract to be legally binding; both parties must provide something of value to one another to form a valid agreement.

Without consideration, a contract may be regarded as incomplete or unenforceable. This principle ensures that both parties have a stake in the transaction and are obliged to fulfill their promises. By emphasizing the necessity of mutual exchange, consideration facilitates fairness and equity in contractual relationships.