Bilateral Contract
A bilateral contract is a legally binding agreement between two parties, where each party makes a promise to the other. In this type of contract, both parties are obligated to fulfill their promises. This stands in contrast to a unilateral contract, where only one party makes a promise and the other party is not obligated to reciprocate.
6 Key excerpts on "Bilateral Contract"
eBook - ePub- Keith Owens(Author)
- 2013(Publication Date)
- Routledge-Cavendish(Publisher)
...CHAPTER 2 CONTRACTS AND WHAT THEY ARE USED FOR WHAT IS A CONTRACT? A contract is a promise or set of promises which the law will enforce. It usually does this by awarding damages for non-performance or for defective performance, but sometimes the court will order the party in default to carry out the contract or not to breach it. Bilateral Contracts Most major business contracts take the form of an agreement consisting of reciprocal promises. This is called a Bilateral Contract. If either party entirely fails to carry out their part of the agreement, or carries it out defectively, the other may sue for breach of contract. Example Amy is a tour operator. She contracts with Beth, an air broker, whereby Beth will provide an aeroplane to undertake specified flights to Spain during the summer from May to September, at a total cost of £250,000. This creates an obligation on both parties. If either party fails to fulfil her obligations, the other may sue for breach of contract. If the breach is sufficiently serious in effect, the innocent party may, in addition, repudiate the contract, bringing it to an end. Unilateral contracts It is possible to have a contract where only one party makes a promise, that is, there is no agreement as such. Such contracts are called unilateral contracts. The difference between a Bilateral Contract and a unilateral contract is that in a Bilateral Contract each party makes a promise or promises to the other. If any promises are broken each may sue the other. In a unilateral contract (which are sometimes called ‘if’ contracts based on the idea that one party says to the other, ‘if you will do such and such, then I will do so and so’), one party’s promise is dependent upon the other party performing an act requested by the offer and doesn’t become operative until that act has been performed. Example Charles guarantees David’s overdraft with Eastern Bank (that is, Charles agrees to pay if David defaults)...
eBook - ePub- Jennifer Corrin-Care(Author)
- 2015(Publication Date)
- Routledge-Cavendish(Publisher)
...As discussed in Chapter 1, a contract is a legally binding agreement made between two or more people who intend it to have legal effect. There are therefore two elements: an agreement and legal enforceability. This chapter discusses the first element, but is should always be borne in mind that not all agreements are legally enforceable. The other elements required for enforceability are discussed in later chapters. In order to have an agreement, you must have at least two parties. They are commonly called the ‘promisor’ and ‘promisee’. In the case of a unilateral contract, there is only one promisor and the promisee may accept the unilateral offer by taking the requisite action, but he or she is not required to give a promise in return. In the case of a Bilateral Contract, which consists of the mutual exchange of promises, both parties will be ‘promisors’ and ‘promisees’. Which party is being referred to depends on the context in which the words are being used. If the context does not make it clear, alternative terms, referring to the capacity of the parties in the contract, such as ‘vendor’ and ‘purchaser’ or ‘employer’ and ‘employee’, may be preferable. The parties must be of the same mind in order for an enforceable agreement to arise. This is sometimes referred to by using the Latin phrase consensus ad idem, which means ‘concurrence of intention’ or ‘meeting of the minds’. In deciding whether or not there has been a meeting of the minds, the courts adopt an objective approach. In other words, they look at the circumstances surrounding the alleged agreement and, in particular, what the parties have said and done, and ask themselves whether a reasonable person would conclude from that evidence that agreement has been reached. This is as opposed to a subjective approach, which attempts to find out what was present in the minds of the parties...
eBook - ePubBusiness Law
A Straightforward Guide
- (Author)
- 2014(Publication Date)
- Straightforward Publishing Digital(Publisher)
...Ch. 1 BUSINESS LAW-THE LAW OF CONTRACT Underpinning all contracts are four main principles: 1) A contract is an agreement between the parties to that contract-one person makes an offer and the other accepts that offer 2) Both parties have an intention to be legally bound by the agreement-this is usually known as an intention to create legal relations 3) Parties to the agreement need to be absolutely clear as to the terms of the agreement – this is the main area of contention with contracts, as we will see laterc4) There must be consideration provided by each of the parties to the contract – this means that one person promises to give or deliver and the other promises to pay. The offer and the payment – either monetary or in kind - is the consideration. When making a contract, or entering into a contract all parties to the contract must have the legal capacity to enter into a contract. Very importantly, a contract, in most cases, does not have to be in writing – a piece of paper is not necessary, the agreement and evidence of that agreement forms the basis of contract. There are a few important exceptions, including contracts relating to interests in land (Law of property (Miscellaneous Provisions) Act 1989, s 2(1)) and consumer credit (Consumer Credit Act 1974). Other factors affecting formation include: • Form-the way the contract is created (e.g. the sale of land can only be made in the form of a deed) Form is an issue with specialty contracts but not with simple contracts • Privity of contract and the rights of third parties-generally a contract is only enforceable by or against a party to it, subject to exceptions and certain third party rights are now protected in the Contracts (Rights of Third Parties) Act 1999. The nature of contracts – unilateral and Bilateral Contracts The majority of contracts entered into are known as Bilateral Contracts. This quite simply means that each party to a contract agrees to take on an obligation...
eBook - ePubBusiness Law
a QuickStudy Digital Reference Guide
- Linda Harrison(Author)
- 2019(Publication Date)
- QuickStudy Reference Guides(Publisher)
...other EX: Promises to exchange money for property Unilateral: Only one party makes a promise (e.g., “I will pay you $10 to mow my yard”); offer is for a unilateral contract, created only when the yard is mowed; if you say or promise you will mow it, it becomes a Bilateral Contract DEGREE Three contract types Express: Either written or oral agreement of terms by both parties EX: Written car purchase; oral agreement to buy friend’s stereo for $200 Implied: Unspoken understanding between parties EX: Doctor visit: He/She will help you; you will pay his/her bill Quasi-contract: One party receives a benefit from the other party without a contract (e.g., Bill silently watches Joe paint Bill’s house by mistake); courts have ruled Bill must pay because he knowingly accepted a benefit from Joe STATUS Two contract types Executed: Both sides have fully performed; completed Executory: Either or both sides have not yet fully performed Valid or otherwise Valid contract: Contains all the essential elements Unenforceable contract: Has the elements but is not enforceable EX: Time for acceptance has expired; oral when required by law to be written; subject matter is illegal Void contract: An element is...
eBook - ePub- Kenny Chin(Author)
- 2014(Publication Date)
- Routledge-Cavendish(Publisher)
...4 Contract Law You should be familiar with the following areas: • the essentials of contract and the effects of the absence of them • rules relating to offer, acceptance and invitation to treat • use of postal and other means of communication on offer and acceptance • rules of consideration • distinction of legal intention to contract on domestic and social agreements • capacity of minors to make contracts and the effect of the Minors’ Contracts Act 1987 • discharge of contract by frustration and the effects of the Law Reform (Frustrated Contracts) Act 1943 • breach of contract and the remedies • consumer contract and related provisions under various statutes • duties of employer and employee, sex and racial discrimination in employment Introduction A contract is an agreement between two or more parties, who promise to give and receive something from each other and who intend that the agreement be legally binding. Except for some special contracts, for example, sale of a house, there is no general legal requirement that a contract has to be in writing. Verbal contracts are as enforceable as written contracts. The problem with verbal contracts is not on validity but on evidence. When nothing is recorded in black and white it is difficult to prove who has said what. Contract law is categorised in the law of obligation. A contract creates a legal obligation between the contracting parties. When one party has not fulfilled, or is not going to fulfil the obligation, he can be sued for breach of contract. The court will help the innocent party by either ordering damages suffered to be compensated, compelling the party in breach to perform the contract (specific performance order) or prohibiting the wrongdoer to act in a way which would cause further breaches (injunction order). It is therefore important to know how and when a binding agreement has been created...
eBook - ePubIslamic Financial Contracts
A Research Companion
- Hussain Mohi-ud-Din Qadri, Nasir Iqbal(Authors)
- 2021(Publication Date)
- Routledge(Publisher)
...obligation. A contract is entered into with the intention of creating legal consequences.” 16 In the Medjelle aqd (contract) is defined as: “The agreement of both parties to the fulfilment of a certain thing, arising from the agreement and concurrence of the offer and acceptance.” 17 He further defines the conclusion of the contract as: “this is the legal tie which unites together (the offer and the acceptance in such a manner that there appears a sign of their dealing with a thing which was their subject matter.” 18 Dr. Hussain Hamid Hassan defined a contract as: “The legal relationship created by the promise of one of the contracting parties (promisor) with the promise of the other (promisee) as a result of which flow consequences in respect of the subject matter of the contract.” 19 A modern author, “M...
