A bilateral contract is one in which:
Correct Answer
B) Both parties exchange mutual promises to perform
A bilateral contract involves mutual promises — both parties are obligated to perform. A typical real estate purchase and sale agreement is bilateral: the buyer promises to pay the purchase price and the seller promises to convey title. This contrasts with a unilateral contract, where only one party makes a promise and the other party accepts by performing an act, such as an open listing where the seller promises a commission only to the broker who produces a buyer.
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