NFPA Paralegal Core Competency Exam (PCCE)Substantive LawEasy
A client, a small business owner, enters into an agreement with a supplier for a large quantity of raw materials. The agreement states that the supplier will deliver the materials 'on or about October 1st' and that payment is due 'within 30 days of delivery.' Which of the following best describes the type of contract formed?
- AUnilateral contract
- BImplied contract
- CBilateral contract
- DVoidable contract
Show answer & explanationAnswer & explanation
Correct answer: C. Bilateral contract
A bilateral contract is formed when both parties make promises to each other. In this scenario, the supplier promises to deliver, and the business owner promises to pay, fulfilling the definition.
Why the other options are wrong
- A. A unilateral contract involves a promise by one party in exchange for an action by the other.
- B. An implied contract is inferred from the conduct of the parties, not from explicit promises.
- D. A voidable contract is valid but can be annulled by one or both parties due to a defect.
Bilateral Contract
A type of contract where both parties exchange a promise to perform an act in the future. It is the most common type of contract.
- Mutual promises are exchanged.
- Both parties are obligors and obligees.
- Enforceable upon the exchange of promises.
Memory trick: Many Promises Make a Bilateral Bond.