A bilateral contract is an agreement that is binding on both parties. A valid contract, in New York, and everywhere else, must satisfy specific conditions, and violating the terms of that agreement may have legal consequences.
Not every agreement is binding. The basic requirements for a bilateral legal contract include the following three conditions.
The signers must be mentally competent and of legal age. In addition, the offeror must have ownership or authority to transfer an asset under consideration. For example, a residential property seller can’t sign a purchase agreement unless they own the property or have power of attorney to act on behalf of the owner for that transaction.
There must be an offer and acceptance. Mutual assent often follows a negotiation period in which the parties go back and forth until they reach a “meeting of the minds” regarding the terms of the contract.
The two parties must exchange something of value. In a bilateral contract, there is a giver (offeror) and a receiver (offeree). The consideration can be a tangible asset like money or property or something intangible like the promise to perform. For example, once you sign a contract with a landscaper to mow your lawn, they are legally bound to perform that task according to the contractual terms.
Sales and business contracts are usually bilateral. Familiar types include:
- Home purchase or lease
- Auto purchase or lease
- Employment contract
- General contractor agreement
There may be legal consequences when one or both parties fail to live up to their side of the agreement.
A breach of contract occurs when one party decides not to honor the terms of the agreement. New York contract disputes are an everyday occurrence. If there is a lot at stake or people get angry enough, these disagreements may escalate to the point where one of the parties files a civil lawsuit. Fortunately, parties may negotiate an out-of-court settlement, avoiding the cost and time of a hearing.
To minimize legal complications, make sure you have an ironclad agreement before you sign.