Final answer:
Each party in a two-party contract must receive a benefit or suffer a legal detriment for consideration to be present and the contract to be valid. Consideration is the value promised in exchange for the other party's performance or promise, ensuring mutuality of obligation.
Step-by-step explanation:
In a two-party contract, it is true that each party must either receive a benefit or suffer a legal detriment. The concept of consideration is fundamental to the formation of a valid contract in many legal systems. Consideration refers to the value that is promised by one party to another when making a contract. It is the inducement to enter into a contract, and it must be something of value in the eyes of the law. This could take the form of performing an act that one is not legally obligated to do or refraining from doing something that one has the legal right to do (legal detriment). On the other hand, a benefit to the other party could be receiving money, services, or goods as part of the agreement. Both elements—benefit and legal detriment—are crucial for a contract to have valid consideration and be enforceable.
It is essential for both parties to have consideration or the contract may be considered void or voidable, under the doctrine of mutuality of obligation. The requirement of consideration ensures that there is a mutual exchange and that each party has given and received something of value.