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
The interest left in an estate after all costs have been deducted. For example, if a business is willed to X for life with the balance to Y upon X's death, Y has a remainder interest. ...
Structure have two dwelling units under the same roof. Two-story apartment unit. ...
Association of people not treated as a corporation. Examples are a limited partnership and a group of cooperative owners. ...
A home seller and a home buyer agreed upon a fair market value and the deal is off to closing the sale. One of the next steps is running a title search. But what is a title ...
Privilege of a real estate investor or lender to participate in the profitability generated from property. This is in addition to any principal, interest, or dividends. ...
receiving something such as a cash payment. Written statement that something has been received such as cash, real property, or documents. The purchaser should always get a receipt. An ...
Structure not directly belonging to a property but considered a part of it through the use of an easement of common consent. ...
A form completed out by a borrower specifying personal and financial data to be considered by the lender in evaluating borrower risk. The information typically includes the following: ...
In a mortgage, a provision that allows part of the security to be released from any further lien obligations upon the borrower's making a given payment. For example, a person may get a ...
Have a question or comment?
We're here to help.