Question

What are bilateral and unilateral contracts?

Answer 1

A **contract** is simply an agreement between two or more parties that is legally enforceable. **Bilateral** and **unilateral** contracts are two common types of contracts, and they differ based on the number of promises made.

### 1. **Bilateral Contract**  
In a **bilateral contract**, both parties make promises to each other. It's a "mutual exchange of promises." For example:

- Person A promises to sell their car to Person B for $10,000.
- Person B promises to pay Person A $10,000 for the car.

In this case, both parties are making a promise: Person A promises to deliver the car, and Person B promises to pay the money. This kind of contract is the most common type.

### Example:
- You agree to work for an employer in exchange for a salary. The employer promises to pay you, and you promise to perform the work.

### 2. **Unilateral Contract**  
In a **unilateral contract**, only one party makes a promise, and the other party is not required to make a promise. The contract is only completed when the second party performs an action. It's like a "promise for a promise," but only one side is making the promise.

For example:

- Person A promises to pay $500 to anyone who finds and returns their lost dog.
- Person B doesn’t promise to find the dog, but if they do, they’ll receive the $500.

In this case, Person A has made a promise, but Person B only completes the contract by performing the action (returning the dog). Until Person B acts, the contract isn’t fully executed.

### Example:
- A reward offer: "I will pay $100 to anyone who finds and returns my lost watch."

### Key Differences:
- **Bilateral Contract:** Both parties promise to do something.
- **Unilateral Contract:** Only one party promises to do something, and the other party performs an action to complete the contract.

Hope that clears things up!