What kind of contract binds two or more parties?

A bilateral contract is a type of agreement where both parties make mutual promises to each other. This means that each party is legally bound to fulfill their part of the contract, creating a reciprocal obligation. In a typical bilateral contract, one party may agree to sell a property while the other party agrees to pay a certain price for it. The essence of a bilateral contract is the exchange of these promises, which forms the basis of the agreement and makes it enforceable by law.

In contrast, an implied contract is formed by the actions or conduct of the parties rather than a verbal or written agreement, leading to obligations that may not be explicitly stated. A unilateral contract involves a promise made by one party in exchange for an act by another party, where only one party is bound to perform. An expressed contract is one that is clearly stated, either orally or in writing, but does not necessarily mean that both parties are bound in the same way that a bilateral contract entails.

Understanding the differences among these types of contracts is crucial in real estate transactions as it helps identify the obligations and rights of each party involved.