This statement is true or false: The term 'consideration' means that both parties to a contract must exchange something of value.

The statement is true because 'consideration' in contract law refers to the requirement that both parties involved in a contract must exchange something of value in order to create a binding agreement. This can include money, services, goods, or a promise to do or not do something. Consideration is essential for the formation of a contract, as it signifies that all parties are willing to enter into the agreement and acknowledges the mutual benefits derived from the contract.

In a contract, the consideration does not have to be equal in value, but there must be some form of exchange that signifies that both parties are providing something to the transaction. This principle ensures that there is a lawful and enforceable agreement, obligating each party to fulfill their respective promises or duties.

The idea that consideration is only required in written contracts is incorrect because consideration is necessary for both oral and written contracts. Additionally, the concept cannot be partially true since the definition is strictly that both parties must exchange something of value to establish consideration fully.