What type of contract involves mutual promises between two parties?

A bilateral contract is characterized by mutual promises between two parties. In this type of agreement, both parties commit to fulfilling specific obligations or promises. For instance, in a real estate transaction, one party may agree to sell a property while the other party agrees to pay a certain amount in exchange. This mutual exchange establishes a binding agreement where both parties are legally obligated to uphold their respective promises.

In contrast, a unilateral contract involves only one party making a promise, with the other party not being bound to act until that promise is fulfilled. A voidable contract refers to an agreement that may be legally canceled by one party due to certain circumstances, such as misrepresentation or duress. Lastly, an implied contract is formed through actions or conduct rather than written or spoken words, indicating the parties’ intentions based on their behaviors and situations. Hence, bilateral contracts are significant in real estate as they clarify the responsibilities of all parties involved.