The term “bilateral contract” refers to a contract in which both parties agree to fulfill contractual duties reciprocally towards each other. A bilateral contract if formed by the exchange of promises in which the promise of one party is consideration supporting the promise of the other.
A contract for the sale of goods is a bilateral contract whereby the buyer promises to pay in exchange for the seller’s promise to sell.
(n) An arrangement wherein both parties exchange commitments to accomplish a task for the future. An example of this is in retail of a property such as one party promising to sell a house and the other party promising to pay for it for a specific amount. This is different from a unilateral contract where promises are made by one party such as paying a sum if the other party accomplishes the given task. Essentially, these are only scholastic conflicts which are merely of importance in unusual situations where a person has performed an action because of the expectations that the other party will also have certain obligations.
Compare with “Unilateral Contract”