_____ is the value exchanged for performance.

_____ is the value exchanged for performance.

• A. Offer
• B. Authority
• C. Consideration
• D. Capacity

Answer: (C)

Consideration is the value exchanged for performance. In a contract, for the agreement to be enforceable, each party must give or promise to give something of value in return for the other party’s promise or act. This value can be money, goods, services, or a promise to do or not do something. The important part is that it’s bargained-for—each side commits something in exchange for the other’s performance. In a design-build project, the owner’s payment in exchange for the design-build team delivering the design and construction services is the consideration that makes the contract enforceable. Without this exchange of value, there isn’t a binding contract. The other terms describe different aspects of forming contracts: an offer is a proposal to enter into an agreement, authority is the power to bind the organization, and capacity is the legal ability to enter a contract. They matter, but they aren’t the value that the contract is built on.

Consideration is the value exchanged for performance. In a contract, for the agreement to be enforceable, each party must give or promise to give something of value in return for the other party’s promise or act. This value can be money, goods, services, or a promise to do or not do something. The important part is that it’s bargained-for—each side commits something in exchange for the other’s performance. In a design-build project, the owner’s payment in exchange for the design-build team delivering the design and construction services is the consideration that makes the contract enforceable. Without this exchange of value, there isn’t a binding contract.

The other terms describe different aspects of forming contracts: an offer is a proposal to enter into an agreement, authority is the power to bind the organization, and capacity is the legal ability to enter a contract. They matter, but they aren’t the value that the contract is built on.