What are the two types of consideration that a contract must include?

In the context of contract law, consideration refers to something of value that is exchanged between parties when entering into a contract. The correct answer identifies the two types of consideration as valuable and good.

Valuable consideration involves tangible benefits or services exchanged for something else, which can be quantified in monetary terms. This might include payments or the exchange of property. Good consideration, on the other hand, pertains to non-tangible elements such as promises or services that are of worth to the parties involved but may not have a direct monetary value. This is often based on love, affection, or a moral obligation.

For a contract to be legally binding, it must contain consideration that qualifies under these categories. This differentiation ensures that both parties receive something of value, thus reinforcing the validity of the agreement and creating a mutual obligation.

The other options, while discussing various types or forms of contracts or agreements, do not accurately capture the essential legal concept of consideration in contract law, which is key to creating enforceable agreements.