Bilateral Contract and Unilateral Contract

Bilateral Contract and Unilateral Contract is usually a reciprocal set of promises. It begins with an offer made by a party to do or abstain from doing something for a consideration from the second party. Thus there must be an offer from one person to do or not to do a thing, which must be accepted by another person to become an agreement. The agreement that can be enforced by law is called a contract. Agreements are contracts only if they are enforceable in law. The offer to do a thing must be made by the party to a specific person or to the general public. Such an offer may be accepted as it is, or may require the accepting party to make a counter offer. The action of accepting in either manner results in contractual obligations. When a shop keeper offers to sell an item at $300, and puts up a price tag, any person who purchases it pays the $300 to take the goods as it is offered. In this case the contract becomes complete with the sale. All our daily purchases are done on this principle and each day we enter in to hundreds of contracts. ("Contract Basics," 2008)

For a contract to be legal there are some basic considerations. The parties to contract must not suffer from legal disabilities that are they must be above eighteen years, and of sound mind. There must be a consideration for a contract. There cannot be a promise without reciprocity. Thus free services cannot be contracts and social obligations like a promise to take someone out on account of love and affection are not valid considerations. Illegal agreements are not contracts because the law will not enforce illegal agreements. There are many types of contracts but in this essay we are concerned with the Unilateral and Bilateral contracts. It is very important to know the distinction between the two because both types have different set of operations in most countries. The implications, rights and enforcement vary between the types. ("Contract Basics," 2008)

Unilateral contract is offers made by one person against whom that offer is binding but is not binding on persons to whom it is offered. For example 'Car for sale - price $7,000" is a unilateral offer and if someone says I like the car, but does not pay or do anything to signify a purchase, there is no obligation on him. But if the agreement is more elaborate - like a reciprocal offer or promise to buy the car at that price another day - "I will pay cash and buy it on Monday" is a bilateral contract. ("Contract Basics," 2008) in the first case there was a single offer - sale of a car. In the second case there were two sets of promises, to sell the car and to buy it. In the second case both the parties are bound by the contract. This is the difference between both the types of contracts. The important distinction between a unilateral and bilateral contract is that a unilateral contract can exist or the offer can be accepted only by action and a bilateral contract only by a counter promise. ("About Contracts, n. d.) a. Why does the law make such a distinction between the bilateral contract and unilateral contract?