No consideration No contract

In a contract, when one party offers something to another party and that party promises to provide something in return (i.e. when a successful exchange takes place) then that something is called consideration. It can be profit, interest, goods, services, etc. So, consideration is an essential element of a contract. For e.g. Person A offers to sell television to person B at Rs. 25000 and if person B accepts that offer then for person A Rs. 25000 is consideration and for person B television is consideration.

Thus, consideration refers to promise of a party for the promises of another to the contract. An agreement made without consideration is void. It is always not necessary that consideration should be tangible in nature. It can be intangible also. For e.g. service consideration. A contract without consideration is gift.