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
Conifer wood, such as pine and redwood. ...
The time period a real estate investment is held. The return is tied to the time period of the investment. The period is used for income tax purpose to determine whether a profit earned or ...
Defect in the tax law that either may provide a loophole to minimize the tax payment or result in higher taxes than there should be. ...
The process of changing, updating, and altering the appearance and structural characteristics of a building. For example, John remodels the kitchen in his home by replacing the cabinets, ...
Limited partnership in which limited partners rely on the general partner to choose specific properties after the funds are available. ...
Claude in a contract, title, or mortgage that is subject to being annulled, repealed, or revoked upon the satisfaction of a claim or completion of a future event. ...
person's behavior partly genetic and partly learned through experience over time. Some people have good personal traits while others have poor ones. ...
Same as term government rectangular survey: Way in which the U.S. government uses to subdivide public land. Land is designated as either a base line (East-West) or principal meridian line ...
Initial user of real estate property, such as the first tenant in a newly constructed apartment building or office building ...
Have a question or comment?
We're here to help.