Bilateral Contract

AAA

DEFINITION of 'Bilateral Contract'

A bilateral contract is a reciprocal arrangement between two parties where each promises to perform an act in exchange for the other party's act. Each party is an (a person who is bound to another) to its own promise, and an obligee (a person to whom another is obligated or bound) on the other party's promise. A bilateral contract specifies a duty to act in exchange for another party's duty to act.

INVESTOPEDIA EXPLAINS 'Bilateral Contract'

A bilateral contract, as opposed to a unilateral contract, is the type of contract that frequently comes to mind when contemplating contracts. It is a contract between two people or parties. An example of a bilateral contract would be the contract for the sale of a home. A home buyer agrees to pay the seller a certain amount of money in exchange for the title to the home; the home seller agrees to deliver the title in exchange for the specified sale price. When the contract is not fulfilled there is a breach in contract.

RELATED TERMS
  1. Invitation For Bid - IFB

    When a company or organization provides detailed project specifications ...
  2. Breach Of Contract

    Violation of any of the agreed-upon terms and conditions of a ...
  3. Obligation

    The legal responsibility to meet the terms of a contract. If ...
  4. Title

    The right to the ownership and possession of any item that may ...
  5. Land Contract

    An agreement between a buyer and seller of property in which ...
  6. Deed

    A legal document that grants the bearer a right or privilege, ...
Related Articles
  1. Insurance

    Understanding Your Insurance Contract

    Learn how to read one of the most important documents you own.
  2. Watch for these signs that you or an elderly family member may need to downsize and move somewhere easier to manange. A senior move manager can help.
    Retirement

    Time To Hire A Senior Move Manager?

    Watch for these signs that you or an elderly family member may need to downsize and move somewhere easier to manange. A senior move manager can help.
  3. As Americans age – and families try to cope – the new field of senior move managers helps seniors relocate to safer homes with the least possible stress.
    Retirement

    A New Solution To Help Seniors Relocate

    As Americans age – and families try to cope – the new field of senior move managers helps seniors relocate to safer homes with the least possible stress.
  4. ISDA Master Agreement
    Investing Basics

    ISDA Master Agreement

    The ISDA Master Agreement is a document outlining the terms of an over-the-counter derivatives transaction between two parties. This document serves as a standard agreement in these transactions ...
  5. Budgeting

    4 Contract Essentials You Need to Know

    Over your lifetime, you’ll be asked to sign lots of contracts – perhaps agreeing to purchase a home, a car or to join a new gym or online dating service.
  6. Home Sale Contingencies: What Buyers And Sellers Need To Know
    Home & Auto

    Home Sale Contingencies: What Buyers And Sellers Need To Know

    Home sale contingencies protect buyers who want to sell one home before purchasing another. Find out what buyers and sellers need to know about these contractual conditions.
  7. Contingency Clauses In Home Purchase Contracts
    Home & Auto

    Contingency Clauses In Home Purchase Contracts

    Here, we introduce widely used contingency clauses in home purchase contracts and how they can benefit both Buyers and Sellers.
  8. Options & Futures

    Easy Ways To Cut Rental Costs

    If rent payments are crippling your finances, then read on to learn how to save your money.
  9. Investing

    What is an alienation clause?

    Whether used in reference to insurance policies, mortgages or commercial loans, an alienation clause stipulates that should a purchaser or borrower sell his or her interest to another party, ...

You May Also Like

Hot Definitions
  1. Santa Claus Rally

    A surge in the price of stocks that often occurs in the week between Christmas and New Year's Day. There are numerous explanations ...
  2. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  3. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  4. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  5. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  6. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
Trading Center