Which contract involves two or more parties making mutual promises?

The contract that involves two or more parties making mutual promises is known as a bilateral contract. In a bilateral contract, each party agrees to perform a specific obligation in exchange for the other party's promise to fulfill their own obligation. This mutual exchange of promises creates a binding agreement that is enforceable by law.

For instance, in a real estate transaction, if one party agrees to sell a property while the other party agrees to buy it, both parties are making mutual promises – the seller to transfer ownership and the buyer to pay the agreed-upon price. This reciprocal nature is what characterizes bilateral contracts.

In contrast, an implied contract relies on the actions or circumstances of the parties involved rather than explicit promises, while a unilateral contract involves one party making a promise that the other party can accept through action, not mutual promises. An executed contract refers to a contract that has been fully performed by all parties, but it does not inherently involve the concept of mutual promises that is central to a bilateral contract.

Thus, the defining characteristic of a bilateral contract—mutual promises—makes it the correct answer.