Bilateral Contract

Definition - What does Bilateral Contract mean?

A bilateral contract is one in which each party promises to fulfill certain obligations. It is the most common type of contract.

Insuranceopedia explains Bilateral Contract

A bilateral contract is essentially an agreement between two or more parties, binding all of them to reciprocal obligations. Each of the parties in a bilateral contract are simultaneously obligors (owing another party the performance of some act) and obligees (those owed the performance of some act from another).

Most insurance contracts are not bilateral but unilateral, since only the insurer makes a legally binding promise to the insured.
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