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A "Bilateral Contract" is an agreement where two parties make promises to each other. In this type of contract, both sides have something they need to do or give in exchange for the other side's action or item.
For example, when someone agrees to sell their house to a buyer, the seller promises to give the house to the buyer, and the buyer promises to pay the seller the agreed-upon amount of money.
"A Deep Dive for Real Estate Agents and Appraisers"
A few more things to keep in mind about bilateral contracts:
Real Estate Contracts: Most real estate contracts are bilateral. When a buyer makes an offer on a house and the seller accepts it, they've entered into a bilateral contract. The buyer promises to pay a certain amount, and the seller promises to deliver the property.
Contingencies: Many real estate contracts include contingencies, which are conditions that must be met for the contract to be fully enforceable. For example, a common contingency is the buyer obtaining satisfactory financing. If they can't, the contract may be voided. These contingencies are part of the bilateral contract.
Breach of Contract: If one party doesn't fulfill their promise in a bilateral contract, it's known as a "breach of contract." The non-breaching party usually has the right to take legal action, seeking remedies such as specific performance (forcing the breaching party to fulfill their obligations) or damages (compensation for the breach).
Unilateral vs Bilateral: Contrast this with a unilateral contract, where only one party makes a promise. For instance, a homeowner might enter into an open listing agreement with a broker, promising a commission if the broker finds a buyer for the property. In this case, the homeowner is obligated to pay if the broker fulfills the condition of finding a buyer, but the broker has no obligation to actually find a buyer.
Contract Law: Bilateral contracts are a part of contract law, which can be quite complex. As a real estate agent or appraiser, you don't have to be a legal expert, but a basic understanding of how contracts work is essential.
These principles are key to understanding the commitments made in real estate transactions. Remember, when dealing with contracts, it's important to read and understand all terms before signing, and don't hesitate to seek legal advice when needed.
"Wit & Whimsy with the Dumb Ox: Unlocking Knowledge with Rhyme:"
A Bilateral Contract, you see my young friend,
Is an agreement where both parties must bend.
They each make a promise, oh yes, it is true,
One side gives something, the other side too.
Like when selling a house, the buyer and seller agree,
The house for some money, a trade fair and free.
A Bilateral Contract, it's easy to see,
Two promises made, in perfect harmony.