### What is a bilateral contract? - [ ] An agreement where only one party is obligated to perform a service. - [x] An agreement where both parties are obligated to perform an action or service. - [ ] A non-binding agreement between two parties. - [ ] An agreement that only occurs in real estate transactions. > **Explanation:** A bilateral contract describes an agreement that requires both parties to perform an obligation. It involves reciprocal roles where both sides are committed to fulfilling their part of the deal. ### Which of the following is an example of a bilateral contract? - [ ] A one-sided agreement where a service is performed if a condition is met. - [ ] A gift given from one party to another with no expectation of return. - [x] A lease agreement where one party agrees to pay rent, and the other party allows occupancy. - [ ] An informal handshake understanding. > **Explanation:** A lease agreement is a typical example of a bilateral contract. The tenant agrees to pay rent, while the landlord agrees to provide the property for occupancy, thereby creating mutual obligations. ### In a bilateral contract, what needs to happen for the contract to be fulfilled? - [ ] Only one party must perform their obligation. - [ ] Neither party needs to perform any action. - [x] Both parties must reciprocate and perform their agreed-upon obligations. - [ ] The contract automatically fulfills over time. > **Explanation:** In a bilateral contract, both parties must fulfill their obligations for the contract to be completed. This reciprocal performance is essential for the contract’s fulfillment. ### Another term commonly used to describe a bilateral contract is: - [ ] Non-reciprocal contract - [x] Reciprocal contract - [ ] Unilateral contract - [ ] Singular contract > **Explanation:** Bilateral contracts are often referred to as "reciprocal contracts," since both parties are required to reciprocate in order to fulfill their obligations. ### Which of the following is NOT true about bilateral contracts? - [x] They do not legally bind the involved parties. - [ ] They require both parties to fulfill their part of the agreement. - [ ] A seller agrees to split costs under certain conditions in such contracts. - [ ] They create mutual obligations between the agreed parties. > **Explanation:** Bilateral contracts are legally binding agreements that create mutual obligations between the parties involved. It is not true that these contracts do not legally bind the parties. ### What is a key characteristic that distinguishes a bilateral contract from a unilateral contract? - [ ] Only one party makes a promise in both contracts. - [ ] Both involve non-binding agreements. - [x] A bilateral contract involves mutual promises, while a unilateral contract involves a promise from only one party. - [ ] They both act under gift principles. > **Explanation:** A bilateral contract involves mutual promises and obligations, whereas a unilateral contract involves a promise from only one party that is contingent on the other party performing a specific task. ### In the given example, why is a lease agreement considered a bilateral contract? - [x] It involves the tenant agreeing to pay rent and the landlord agreeing to provide the property for occupancy. - [ ] It is an informal understanding between two parties. - [ ] Only one party has an obligation to perform a service. - [ ] No expectation of performance from both sides. > **Explanation:** In a lease agreement, there are mutual promises: the tenant agrees to pay rent, and the landlord agrees to provide occupancy, creating a bilateral contract. ### Which scenario best illustrates the concept of a bilateral contract? - [ ] Sam promises to pay Jane $50 if she finds his lost dog, but Jane is not required to find the dog. - [ ] A parent promises to buy a child a toy but sets no conditions on the child. - [x] Alex agrees to paint Beth's house if Beth agrees to pay Alex $500. - [ ] An employer offers to reimburse school tuition with no obligations for tenure. > **Explanation:** The agreement where Alex agrees to paint Beth's house for $500 is an example of a bilateral contract because both parties have mutual obligations. ### Why might bilateral contracts also be referred to as "reciprocal contracts"? - [ ] They are signed only in the presence of legal individuals. - [ ] Payment and service occur simultaneously. - [ ] They contain non-reciprocal promises. - [x] Both parties reciprocate by completing their part of the agreement. > **Explanation:** Bilateral contracts are referred to as "reciprocal contracts" because the performance of one party’s obligation is in return for the performance of the other party’s obligation. ### Who are the parties involved in a bilateral contract? - [ ] Only the service provider. - [ ] Only the recipient of the service. - [x] Both parties who have mutual obligations to each other. - [ ] Any third-party interests. > **Explanation:** Both parties involved in the contract have mutual obligations towards each other, fulfilling the requirements of a bilateral contract.