Bilateral Contract
A bilateral contract is a pretty straightforward term. No horseplay there. It’s a legal agreement between two individuals who both agree to do (or not to do) a specific act.
The truth is that, when you think of the standard contract, you think of a bilateral contract. It’s one of those instances where one part of the term is so usual, it gets dropped out of the term, so people omit the “bilateral” and just say contract. In it, each party has its set of obligations; even if it’s party A does a service, party B pays for it. Or, more simple than that: if party A is responsible for giving money and party B for transferring the title to party A.
However, there are rare unilateral contracts where one party is under the obligation of giving a compensation should the other party perform a specific task, but the other party is not obligated to perform that task. In other words, when one party failing to perform a task is not considered a breach of contract, it’s not a bilateral contract but a unilateral.
An example of a bilateral contract in real estate is a regular property sale. The home seller is obligated to give the house and put it under the buyer’s name if the home buyer pays for the amount specified on the bilateral contract. Now, in an exclusive agency listing, what the real estate agent does with a home seller is not a bilateral contract but an unilateral contract because it specifies that the homeowner must pay a commission to that agent if the real estate agent brings the best deal for him; however, he is not in breach of contract if he doesn’t bring the winning bid. Got it?
Sign a bilateral contract with “smart”: don’t go the For Sale By Owner (FSBO) route; find a real estate agent to go with you on this journey!
Popular Real Estate Terms
Derogative term describing a high-pressure telemarketing office where sales personnel often use extremely exaggerated claims as well as intense sales practices to convince targets clients ...
Unfortunately, we encounter false advertising daily. False advertising refers to deceptive or misleading ads and commercials that fail to showcase a product’s or service’s ...
Type of ownership by husband and wife, recognized in 27 states, in which the rights of the deceased spouse pass to the survivor. It is the same as joint tenancy, except that one spouse ...
Platform erected on a roof in some New England homes having a view of the sea. It was said widows of lost seaman would walk on the platform looking out at sea for their husbands to return ...
One who has committed a tort. A tort is a civil wrong that occurs as a result of a breach of legal duty owed to someone, e.g., negligence. A tort does not arise from a breach of contract. ...
A purchase of real property made on account. Loan extended to business or individuals to buy real estate. In taxation, a dollar-for-dollar reduction in taxes. An example of a tax ...
The tenant is forced to leave the premises if he complains about the poor condition of the apartment or office space he has leased. This type of eviction is illegal in many states. ...
Descriptive of the architectural development of property in a certain area. For example, a housing subdivision may use very similar building architecture throughout the development. All the ...
Balcony or low ceiling overhang just above the main floor and between the next story. In a theater, a mezzanine is the first balcony above the stage. ...
Have a question or comment?
We're here to help.