In a bilateral contract, what typically occurs?

In a bilateral contract, both parties agree to perform certain obligations, creating mutual responsibilities. This means that each party promises to fulfill their side of the agreement, and both are legally bound to comply. For example, in a real estate transaction, the seller agrees to transfer ownership of a property, while the buyer agrees to pay a specified amount for that property. The essence of a bilateral contract lies in this exchange of promises, which forms the foundation of many real estate agreements.

Mutual obligations are crucial because they provide both parties with recourse should one side fail to meet their commitments. This aspect distinguishes bilateral contracts from unilateral ones, where only one party makes a promise and is obligated to perform, while the other party is not bound until certain conditions are met.

While some bilateral contracts indeed may need to be in writing to be enforceable, this requirement is not universal for all bilateral contracts. Additionally, claims about enforcement can vary based on the context of the contract and applicable laws, meaning that the ability to enforce is generally not limited to one party, but rather holds potential for both parties under the contract's terms.