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Bilateral Versus Unilateral Contracts

Bilateral Versus Unilateral Contracts

A bilateral contract is one where both parties are to perform their promises or obligations at some future time but not necessarily at the same time. A unilateral contract is one where one of the parties performs his promises at the time of making the contract and the other party promises to perform in the future. For example, if Vincent promise to sell Joe a Car for $1000 and Joe promises to pay $1000 for the car, the contract is bilateral and executory on both sides. However if Joe promises to pay $1000 when Vincent delivers the car to him and Vincent does so, then the contract is unilateral, executed as to Vincent but executory as to Joe. In other words it simply means a bilateral contract is enforceable only when Joe offers to buy the car from Vincent, and Vincent agrees. And a unilateral contract becomes enforceable when that Joe promises to pay $1000 for the car if Vincent agrees to deliver the car to him.

There are two kinds of contract. The usual variety is called bilateral in which both parties promise to do something for the other, and are bound together from a precise moment in time. This is sometimes referred to as “mutuality of undertaking”. The less common species is the unilateral contact, in which only one party promises. The other makes no promises but performs an act in return for the other party’s promise. The bilateral situation is the more normal one and is a mutual contractual obligation from the outset. The contract is formed before anything is done, though often only seconds before performance begins. The unilateral contract, on the other hand, is formed only after completion of the act. Performance by one party and his acceptance coincide. In both bilateral and unilateral contracts there is offer and acceptance, but the analysis differs which I will show you.

Firstly, I will discuss about the bilateral contact. An example of this type of contract is Thornton v. Shoe Lane Parking in which a professional musician, Francis Thornton, had a job for a day playing his trumpet for the BBC at Farringdon Hall in central London. The plaintiff decided to leave his car nearby in a recently opened multi-storey car park in Shoe Lane close to Fleet Street. He drove up, pressed a button and received a ticket, at which point the barrier...

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