how a bilateral contract works
the bilateral contract is the most common kind of binding agreement each party is both an obligor a person who is bound to another to its own promise and an obligee a person to whom another is obligated or bound on the other party s promise a contract is signed so that the agreement is clear and legally enforceable any sales agreement is an example of a bilateral contract a car buyer may agree to pay the seller a certain amount of money in exchange for the title to the car the seller agrees to deliver the car title in exchange for the specified sale amount if either party fails to complete one end of the bargain a breach of contract has occurred 1in that sense virtually all of our daily routine transactions are bilateral contracts sometimes with a signed agreement and often without one business contracts are almost always bilateral businesses provide a product or service in exchange for financial compensation so most businesses are constantly entering into bilateral contracts with customers or suppliers an employment agreement in which a company promises to pay an applicant a certain rate for completing specified tasks is also a bilateral contract 