What does consideration in contract law refer to?

Consideration in contract law refers to the requirement that there must be something of value exchanged between the parties to a contract. It is the basis for a binding agreement that signifies that each party is providing something in exchange for the other party's promise. This can take the form of an act, forbearance, or a promise to perform an action. Essentially, consideration is the "bargained-for" exchange that makes a contract enforceable.

In this context, when one party performs an act or refrains from doing something, this creates a reciprocal obligation—to provide consideration—validating the agreement between the parties. Without consideration, a contract may not be upheld in court, as courts generally enforce contracts that are supported by this mutual exchange of value.

The other responses do not accurately represent the concept of consideration. While the total amount of money involved may be one aspect of a contract, it does not capture the essence of consideration. Furthermore, a written document outlining terms refers to the medium by which a contract may be formalized but does not define consideration itself. Lastly, a unilateral decision by one party does not embody the mutual exchange necessary for consideration, as it lacks the reciprocal element required in a contractual agreement.