A bilateral contract in real estate is best described as one in which:

Correct Answer

B) Both parties exchange mutual promises, each obligating themselves to perform.

A bilateral contract involves mutual promises between two parties — each party is both a promisor and a promisee. A standard Delaware real estate purchase agreement is a bilateral contract because the buyer promises to pay the purchase price and the seller promises to convey clear title. This distinguishes it from a unilateral contract, in which only one party makes a promise that the other party accepts through performance.