Most contracts are bilateral in nature. This means that each party takes on an obligation usually promising the other party something in return.

A bilateral contract is therefore characterized by mutuality of obligation, promise and duty between the parties.

By contrast, a unilateral contract arises when one party promises to do something (usually to pay money) if someone else does a certain thing (or in some cases does not do a certain thing). A common example of a unilateral contract is that between estate agents and people trying to sell their houses as the seller promises to pay a specified percentage of the house price to the estate agent if the house is sold, but the estate agent is not required to promise in return to sell the house, or even to try to do so.

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