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
When a property owner defaults on his or her tax payments, the taxing jurisdiction may force a liquidation of the property or tax sale for the purpose of collecting the owed real estate ...
(1) Bracket used to support an extended eave or cornice on the outside of a house. (2) Truss or beam projection beyond its base and supported by its strength and rigidity, such as a ...
Main street having a divider either in the center or between the curb and sidewalk with trees, grass, or other shrubbery. ...
Any financing agreement excluding a conventional mortgage from a third-person or entity lending institution. This type of financing is more prevalent when the price of real estate is too ...
There’s a time when it’s neither a Buyer’s Market nor a Seller’s Market. We call it “Renter’s Market”. It’s that time where, despite ...
Legal mechanism available for a person who is over his head financially and is unable to meet his financial obligations. ...
The definition of in rem in real estate is a legal case against a property rather than a person. The legal application of in rem in real estate is most often seen when a homeowner defaults ...
CE Shop has become a widely used and popular term in real estate. But what does it mean? “CE” stands for continuing education, and in the real estate business, it implies a ...
In land surveying, the point al which two properties intersect constituting a boundary line between the properties. A corner can be determined by either a survey or general agreement ...
Have a question or comment?
We're here to help.