Consideration in contract law is the value or benefit given by each party in exchange for the other party’s value or benefit—such as money in exchange for products or services, or mutual promises exchanged.

Consideration is often referred to as the bargained-for exchange in which one consideration is exchanged for another consideration.

A mere promise to do or refrain from doing something that lacks consideration in the form of a value or benefit provided by the other party (a return promise) is not a contract and is generally not enforceable. One exception to this rule may be if one party promises to do or refrain from doing something, and the second party relies on that promise to its detriment (by spending money, for example), the detrimental reliance may create an enforceable contract.

And if the consideration for a contract is so insubstantial that it is worthless, the contract is said to be illusory and is not enforceable.

The existence of consideration is what distinguishes an enforceable contract from a promise to make a gift. Because a gift is a voluntary, gratuitous transfer of property from one person to another—without something of value promised in return—the failure to fulfill a promise to make a gift is not enforceable as a breach of contract, as there is no consideration for the promise to make the gift.

In North Dakota, as in other states, consideration is a fundamental component of a legally binding contract. Consideration refers to something of value that is exchanged between parties when entering into a contract. It can be a promise, an act, a benefit, or a forbearance. North Dakota law requires that each party to a contract must provide consideration for the agreement to be enforceable. This means that a mere promise without a return promise or some form of value being exchanged is typically not enough to constitute a legally binding contract. However, if a party relies on a promise to their detriment (known as promissory estoppel), the contract may be enforced to prevent injustice, even if traditional consideration is lacking. Contracts with consideration that is deemed to be illusory or so insubstantial as to be considered worthless may be found unenforceable in North Dakota. Lastly, promises to make a gift are not enforceable as contracts in the state because they lack the element of consideration; a gift is a voluntary transfer without the expectation of receiving something in return.