In finances, insurance or business in general, a consideration is something that is part of a contract that is crucial for the signing party to agree to sign the contract in the first place. The consideration in question must be valuable to the party, and it must be given in exchange of a certain service. For example, a bank giving a person a loan is a consideration that is provided on the promise that the individual getting the loan will repay the loan over time with interest. If a contract does not have a consideration, then it will be determined by a court to be invalid. This is referred to as “failure of consideration.”
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