Consideration in a contract refers to:

Consideration in a contract is a crucial element that represents the exchange of value between the parties involved. It is what each party agrees to contribute to the contract—this can be in the form of money, services, or goods. In essence, consideration is what makes a contract binding and ensures that both parties have something at stake.

When entering into a contract, both parties must provide consideration to create a legally enforceable agreement. This means that there must be something of value exchanged, affirming that an obligation exists on both sides. Without consideration, a contract may lack the necessary components to be valid under the law.

The other options do not accurately capture the essence of consideration. A formal agreement pertains more to the structure or written nature of a contract rather than the value exchanged. Mutual benefit doesn’t specifically define consideration, even though it may occur in contracts where both parties gain something. A signed document might imply that an agreement has been made, but it doesn't embody the principle of consideration, which is the actual exchange of value necessary for a contract's enforceability.