What is a Bilateral Contract?
Contracts are an integral part of everyday life! Many times, people don’t even know they are participating in a contract. A bilateral contract is an agreement between two people or two groups of people. It can also be a contract between a company and a person or group of people. Basically, it as a legal agreement between two parties. Bilateral contracts don’t have to be in writing. For example, if a person is dining at a sit-down restaurant they can expect that the restaurant personnel provide them with service and get their order right in return for payment. Or a contract can be in writing such as a written lease for when a person leases a house to live in. The lease is between the landlord and the tenant.
What is the Difference Between Unilateral and Bilateral Contracts?
A unilateral contract is where one person or group makes an agreement or promises to do something. And a bilateral contract is an agreement or promise between two people or groups of people. For example, a unilateral contract would be if a woman loses her engagement ring, she might place an ad for a reward if someone finds it and returns it to her. She is the only person obligated in this case, thus it’s unilateral. If someone finds her ring and returns it to her, she must fulfill the obligation to pay them the reward she promised in her ad. An example of a bilateral contract is a contract to purchase a house. A seller agrees to sell the house to a buyer for a certain price and for other specific terms that are written in the contract. A buyer is obligated to meet these terms and close on the property. Both parties made contractual promises and are legally obligated to fulfill them.
Is a Lease a Bilateral Contract?
A lease is considered a bilateral contract because it involves two people or two parties making a legal agreement with each other, the landlord or landlords and the tenant or tenants. A lease is a legal agreement that specifies the rent amount, the dates the rent is due, the dates the lease begins and ends, and other stipulations. The tenant must fulfill the terms of the lease, and the landlord provides the property for them to live in, and fulfills other obligations that the lease states he is responsible for.
Is Employment a Bilateral Contract?
Employment is definitely considered a bilateral contract. The contract is between two people or parties, the employee and the company the employee works for. The company or employer promises and is obligated to pay the employee a certain amount of money to perform certain work. The employee must perform his or her duties and other terms of the employment agreement in order to get paid. The pay can be by the hour or by an annual salary, for example.
Examples of examples bilateral contracts in everyday life
Sales contract for a vehicle – you’re buying a car from someone else.
Sales contract for a house – once again, one party is buying from another party.
Buying a bag of chips – You are giving Walmart $ for a bag. This is another great example.
Key Takeaways
- The bilateral contract is the most common type of contract.
- Any sales agreement is an example of a bilateral contract.
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