Contracts
A contract in which one party makes a promise in exchange for an act by the other party is called a:
ABilateral contract
BUnilateral contract✓ Correct
CExecutory contract
DExecuted contract
Explanation
A unilateral contract involves one party making a promise that the other party can accept only by performing an act. An option contract is a classic example.
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Key Terms to Know
Option Contract
A contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Right of First RefusalA contractual right giving a party the opportunity to match any offer received before the owner can accept it from a third party.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
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