CandleFocus Glossary Editor
A bilateral contract is the most common type of contract found in the modern business world. This agreement is a binding one between two parties, often laying out concessions and obligations on both sides. Typically, these contracts are written out, giving each party an outline of their commitments.
A bilateral contract is typically seen in many financial transactions, such as sales, leases, and employment contracts. In a sales agreement, both the buyer and the seller agree to certain conditions and they both make certain promises to fulfill those conditions. When a lease is signed between a landlord and tenant, both parties agree to stipulations such as when and how much rent needs to be paid and how long the agreement is for. In an employment contract, the employee agrees to certain terms and conditions of their employment, such as what the salary and hours are, as well as other workplace expectations.
The most common form of bilateral contract is known as a bilateral 'contract of exchange.' This type of agreement involves both parties making mutual promises, such as in a sale agreement or an employment contract. The agreement typically involves a 'consideration' such as money or a trade. Both parties must agree to the consideration or the contract will be rendered invalid. This type of contract is also known as a 'two-way contract'.
A unilateral contract, on the other hand, involves only one party committing to an obligation. It is typically used when one party does not want to receive any consideration from the other party in return for their obligations. For example, when a charity organization receives a donation, a unilateral contract is put in place in which the donating party commits to their obligation and does not require anything in return.
Overall, a bilateral contract is the most common type of binding agreement used in the business world. With this type of agreement, both parties agree to certain conditions and they make promises to each other to ensure that they both fulfill their obligations. Unilateral contracts, which involve only one party making a commitment, are also used, but these are more rare than bilateral agreements.
A bilateral contract is typically seen in many financial transactions, such as sales, leases, and employment contracts. In a sales agreement, both the buyer and the seller agree to certain conditions and they both make certain promises to fulfill those conditions. When a lease is signed between a landlord and tenant, both parties agree to stipulations such as when and how much rent needs to be paid and how long the agreement is for. In an employment contract, the employee agrees to certain terms and conditions of their employment, such as what the salary and hours are, as well as other workplace expectations.
The most common form of bilateral contract is known as a bilateral 'contract of exchange.' This type of agreement involves both parties making mutual promises, such as in a sale agreement or an employment contract. The agreement typically involves a 'consideration' such as money or a trade. Both parties must agree to the consideration or the contract will be rendered invalid. This type of contract is also known as a 'two-way contract'.
A unilateral contract, on the other hand, involves only one party committing to an obligation. It is typically used when one party does not want to receive any consideration from the other party in return for their obligations. For example, when a charity organization receives a donation, a unilateral contract is put in place in which the donating party commits to their obligation and does not require anything in return.
Overall, a bilateral contract is the most common type of binding agreement used in the business world. With this type of agreement, both parties agree to certain conditions and they make promises to each other to ensure that they both fulfill their obligations. Unilateral contracts, which involve only one party making a commitment, are also used, but these are more rare than bilateral agreements.