Which type of contract involves an agreement between two parties?

A bilateral contract is defined as a legally binding agreement involving mutual promises between two parties. In this type of contract, both parties commit to fulfilling their respective obligations. For instance, in a typical real estate transaction, one party may agree to sell a property while the other party agrees to purchase it. Each party’s promise constitutes a performance obligation, making the agreement mutual and enforceable.

An implied contract, on the other hand, is formed through the actions or circumstances of the parties rather than written or spoken words. An express contract is clearly stated in words and can be either written or oral, yet it doesn’t inherently encompass the mutual obligation characteristic of a bilateral contract. A unilateral contract involves one party making a promise in exchange for an act by another party, which does not require an agreement to exchange promises from both sides. This distinction highlights why the correct answer centers on the bilateral contract, as it is the only option that explicitly entails an agreement between two parties with mutual obligations.