What is a bilateral contract?

A bilateral contract is a contract where both parties agree to be bound to the performance of the terms of the agreement

For example in a bilateral contract between a real estate broker and a homeowner:

  • the broker agrees to advertise the home for sale and use his best efforts to sell the home for the highest price
  • the homeowner agrees to pay a commission to the broker upon the sale of the home

Contract this with a unilateral contract