A bilateral contract is one in which:
Correct Answer
B) Both parties exchange mutual promises to perform
A bilateral contract involves mutual promises — each party promises to do something in exchange for the other party's promise. A typical real estate purchase agreement is a bilateral contract: the seller promises to convey the property and the buyer promises to pay the purchase price. This distinguishes it from a unilateral contract, where only one party makes a promise (e.g., an option contract).
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