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
Market condition in which sellers exceed buyers, thereby causing prices to fall. In real estate, declining markets may result from unfavorable business conditions and high interest rates. ...
A house having stucco or brick siding mixed with some wood. The house usually is two or more stories. ...
Regulatory rules that have to be followed by the organization in conducting its activities. ...
Real estate not subject to property tax such as that owned by nonprofit entities including charitable, governmental, religious institutions. ...
(1) Subunit integral to a larger unit. (Usually associated with furniture). (2) Permanent fixture or appliance which is not intended to be portable and cannot easily be removed. A home has ...
Time period that a round of regular recurring construction takes place. There may be boom and bust times in construction activity. ...
Main street having a divider either in the center or between the curb and sidewalk with trees, grass, or other shrubbery. ...
An interest in property with the right o possession being postponed into the future until a certain even occurs. There are several possibilities where a future interest in property could ...
An agreement specified in the lease providing the tenant the option to renew the lease for a given time period upon the expiration of the initial lease. Most lease options include the ...
Have a question or comment?
We're here to help.