Contract Law

Consideration must also be present for a legal contract to be formed. The essence of consideration is that a party receives some kind of benefit in return for his promise. Consideration may consist of money, goods, or a promise to do or not do something. The statement "I'll give you my guitar" is not a contract because the giver would receive no specified consideration in return.

When the mutual assent of legally capable parties<--which includes an offer and an acceptance, accompanied by consideration<--to a specific exchange or set of promises occur, a valid contract has been formed.