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Contracts • Types of Contracts
K#002
Legal Definition
Bilateral contracts are all other offers not unilateral, where the offer is typically silent on the method of acceptance.
Plain English Explanation
Generally speaking, just about all contracts you will encounter will be bilateral. Unilateral contracts will always specify the specific performance required in order to accept the contract, but bilateral contracts need only to exchange a promise for a promise.
Hypothetical
Hypo 1: Bob puts an ad up on Craigslist offering to sell his car for $500. Sam sees the ad and e-mails Bob saying he would like to buy the car for $500. Bob replies that he is excited to finally sell the car and the two agree that Sam will stop by the next day to pay for the car and take it from Bob. The next day, minutes before Sam arrives, Amy sees the car in Bob's driveway with a "For Sale" sign in the window. Amy offers Bob $600 in cash. Bob accepts, and Amy takes the car just as Sam walks up to Bob's house. Result: Bob and Sam had a contract. Bob promised to sell Sam his car for $500, and Sam promised to buy Bob's car for $500. Their agreement was binding, and Bob breached the agreement by selling it to Amy instead. Similarly, if Sam never showed up to buy the car, then Sam would be in breach.
Note: With many legal hypos and exam questions, you may be tempted to over complicate things by thinking, "Sure, Bob promised to sell it to Sam, but it's not like Sam will bother suing Bob over this." Or, in the other example where Sam fails to show up, "It'd be too hard for Bob to figure out where Sam lives based off emails, so it's unlikely he'll be able to enforce the agreement to pay." That isn't the point. These questions aren't about what's practical or realistic. Focus on the substance of the questions and fact patterns. Just because many people breach contracts without consequence doesn't mean a contract didn't exist.
Note: With many legal hypos and exam questions, you may be tempted to over complicate things by thinking, "Sure, Bob promised to sell it to Sam, but it's not like Sam will bother suing Bob over this." Or, in the other example where Sam fails to show up, "It'd be too hard for Bob to figure out where Sam lives based off emails, so it's unlikely he'll be able to enforce the agreement to pay." That isn't the point. These questions aren't about what's practical or realistic. Focus on the substance of the questions and fact patterns. Just because many people breach contracts without consequence doesn't mean a contract didn't exist.
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