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 Oregon, 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 payment, service, or a promise to do or not to do something. The key aspect is that it must represent a bargained-for exchange, where each party receives something that motivates them to enter into the agreement. Without consideration, a contract may be deemed unenforceable. However, Oregon recognizes the doctrine of promissory estoppel, which means that if one party makes a promise and the other party relies on that promise to their detriment, the promise may be enforceable even without consideration. This is to prevent injustice due to the relying party's reasonable assumption that the promise would be fulfilled. Contracts with illusory consideration, where the value is so negligible that it does not constitute a real detriment or benefit, are not enforceable in Oregon. Lastly, promises to make a gift are not considered enforceable contracts in Oregon because they lack consideration; there is no exchange of value, as gifts are made without the expectation of receiving something in return.