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Simple English definitions for legal terms
bilateral contract
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A quick definition of bilateral contract:
A bilateral contract is when two people or groups make promises to each other. Each person is responsible for keeping their own promise and making sure the other person keeps theirs. This is different from a unilateral contract, where only one person makes a promise. Examples of bilateral contracts include buying and selling things, getting a job, renting a place to live, and getting a warranty for a product.
A more thorough explanation:
A bilateral contract is a type of contract where both parties make promises to perform certain actions. Each party is both an obligor (someone who is obligated to do something) and an obligee (someone who is owed something) in the contract. This is different from a unilateral contract, where only one party makes a promise.
- A sales contract: The buyer promises to pay the price, and the seller promises to deliver the goods. Both parties are obligated to fulfill their promises.
- An employment contract: The employer promises to pay the employee a certain salary, and the employee promises to perform certain duties. Both parties are obligated to fulfill their promises.
- A lease agreement: The landlord promises to provide a rental property, and the tenant promises to pay rent. Both parties are obligated to fulfill their promises.
- A warranty: The manufacturer promises to repair or replace a product if it fails within a certain period of time, and the buyer promises to use the product according to the manufacturer's instructions. Both parties are obligated to fulfill their promises.
These examples illustrate the concept of a bilateral contract because in each case, both parties are making promises that are contingent upon the other party fulfilling their own promise. If one party fails to fulfill their promise, the other party may have legal recourse to enforce the contract.