Consideration is the price paid (in terms of money or other valuables) when one party makes a promise to another. In other words, something of value must be promised in exchange for a stated action. The promise can be in the form of effort, money, or service. In some cases, a promise not to do something can also be termed as consideration. Simply put, consideration is the value that convinces the involved parties to enter into a contract. A good example is the promise to remit monthly deposits as rent when a tenant leases a house from a landlord. Consideration should be legal and executable, and thus abstract matters, such as offering love or giving a voluntary gift, are not classified as valid considerations.
For example, Person X can approach Person Y and state, “I would like to lease your 50 acres of land to plant cherries, and I will cater for 50 percent of the inputs and in return receive 50 percent of profits.”
Person X’s consideration is the agreement to contribute 50 percent of the cost of inputs and give 50 percent of profits. Person Y’s consideration is the agreement to allow Person X to lease his land and contribute 50 percent of farm input costs.