Which of the following best defines 'consideration' in a contract?

Consideration in a contract refers to the value that is exchanged between the parties involved. This value can take the form of a promise, an action, or a forbearance (agreeing not to act in a certain way). The essence of consideration is that each party must contribute something of value to the agreement, which creates mutual obligations.

In this context, the obligation each party is making to the other captures the concept of consideration perfectly. It emphasizes the reciprocal nature of contracts, wherein both parties agree to provide something in exchange for something else, thus forming a binding agreement. This exchange is crucial for a contract to be legally enforceable.

The other options do not encapsulate the definition of consideration accurately. A promise made by the courts refers more to judicial decisions rather than the parties' obligations in a contract. The legality of the contract pertains to whether the contract is enforceable under law, and written documentation of the agreement is simply a means of formalizing the contract but does not define its core components.