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
Same as term Veterans Administration Mortgage: Mortgage guaranteed up to 30 years by the Veterans Administration to veterans meeting minimum requirements. Originally established by the ...
Tenant that stays in the leased property after the expiration date if the lease. He can be evicted or given a new rental agreement. ...
Created by the US Congress in 1965, the Department of Housing and Urban Development (HUD) is the agency principally responsible for federal programs relating to housing and urban ...
Regulatory rules that have to be followed by the organization in conducting its activities. ...
Same as term real estate investment trust (REIT): Type of investment company that invests money in mortgages and various types of investment in real estate, in order to earn profits for ...
Small piece of carpet often placed under a door or at an entrance to a doorway. ...
In real estate, the term "preamble" refers to an introductory statement that outlines the fundamental principles and goals guiding the industry's practices. Specifically, in the National ...
Appearing in person. In propria personal is a formal judicial request to appear personally before the court to plead a particular matter. While it does not prevent an individual from ...
Tax assessed on a transfer of property made without adequate legal consideration. This tax is based on the appraised value of the property at the time of transfer.Also, gifts of property ...
Have a question or comment?
We're here to help.