Bilateral Contract

Definition: A bilateral contract is formed through an exchange of promises, with each party undertaking an obligation.

Example

A buyer promises to pay the purchase price, and a seller promises to convey the property at closing.

Keep the distinction clear

Bilateral describes promises exchanged, not whether the agreement has two signatures or two pages. The parties may still have conditions and deadlines to satisfy.

Related terms

Unilateral Contract · Sale Contract · Consideration

Keep studying

Valid, Void, Voidable, and Unenforceable Contracts

References: Cornell LII: bilateral contract

Pronunciation (US): bye-LAT-er-uhl KON-trakt (capitals show stress)

Pronunciation reference: Merriam-Webster