What is the term for something of value that motivates the formation of a contract?

The term for something of value that motivates the formation of a contract is consideration. In contract law, consideration refers to the benefit or value that each party agrees to exchange as part of the contract. It is a fundamental element required for a legally enforceable contract. Consideration can take many forms, including money, services, goods, or a promise to refrain from a certain action.

This concept is crucial because a contract must involve an exchange that provides each party with something of value; otherwise, it may be deemed unenforceable. Without consideration, a contract lacks the necessary incentive for the parties to fulfill their obligations, which can lead to a lack of enforceability in a legal context. Understanding this principle is vital for paralegals who assist in drafting and analyzing contracts, as it ensures that agreements meet the legal standards necessary to protect the interests of the parties involved.