Contracts

Which of the following best describes a 'bilateral contract'?

AA contract where only one party makes a promise
BA contract where each party promises to perform an obligation in exchange for the other's promise✓ Correct
CA contract between two brokers for a co-listing arrangement
DA contract that can be modified by either party unilaterally

Explanation

A bilateral contract involves mutual promises — each party promises to do something in exchange for the other party's promise. A real estate purchase agreement is a bilateral contract: the seller promises to deliver title, and the buyer promises to pay the purchase price.

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