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
Road or highway acting as a frontage boundary. ...
Entrance or path to a land parcel. Passageway existing from property. An egress may lead to a roadway or some other form of exit. ...
Provision in a mortgage that requires the final payment to be substantially more than all other payments. ...
Farm land. Land that has trees on it. ...
A special kind of fixed rate mortgage (conventional mortgage) in which the monthly payments are less in the beginning years and more in the later years. After five years it usually levels ...
Document describing the benefits and provisions for people or businesses covered by group insurance. Document in life and health insurance issued to a member of a group insurance plan ...
Horizontal wood siding commonly used on the exterior of buildings which overlap each other. ...
The individual who receives an interest in a life estate after the original life tenant's interest expires. This normally occurs after the death of the life tenant. For example, Mrs. ...
An agreement by which a mortgage is made subject to a junior mortgage. For example, a loan on a vacant lot is made subject to a subsequent construction loan. ...
Have a question or comment?
We're here to help.