When parties enter into a legal binding agreement such as a contract, legal consideration is the crucial element, which makes the involved parties deliver on their promises. This legal consideration is something valuable to all the involved parties in a contract. A type of good or service may be considered legal consideration as long as it is sufficiently valuable enough to the involved parties so that such parties may fulfill their promise in accordance with the contract they entered into.
For an agreement or contract to be upheld in a court of law, a legal consideration must be promised by the promisor. In a unilateral contract, a single party called a promisor makes a promise of a legal consideration in order for the other party, called the promisee, to act or to refrain from acting something that he or she was not obligated to do so until the agreement. In a bilateral contract, both parties make promises of legal considerations. Accordingly, the courts differentiate between a bilateral contract and a unilateral contract by ascertaining if 1 party provided a consideration or if both parties did.
In the case of bilateral contracts, the moment that the parties involved in a contract formally agree upon delivering their respective promises, this is considered as consideration and binds both parties to the promises he or she has agreed to fulfill.
Legal consideration can be in the form of monetary compensation or a type of good or service to be rendered by the promisee in exchange for the promise delivered by the promisor.