A bilateral contract is a type of contract in which both parties exchange promises to perform, and each party is an obligor on their own promise and an obligee on the others promise. In other words, both parties are bound to fulfill their obligations under the contract. Bilateral contracts are legally binding agreements between two or more parties, and they can be established in writing and signed by representatives of the parties.

Examples of bilateral contracts include sales contracts, employment contracts, leases, and warranties. Any sales agreement is an example of a bilateral contract, where the buyer agrees to pay the seller a certain amount of money in exchange for the title to the car, and the seller agrees to deliver the car title in exchange for the specified sale amount. Business contracts are almost always bilateral, as businesses provide a product or service in exchange for financial compensation.

In contrast to bilateral contracts, unilateral contracts only require one party to make a promise or perform an action. For a bilateral contract to be valid, the offeror or promisor has to make an offer that needs to be accepted by the offeree or the promisee. The contract needs to have a defined exchange of value and must have an adequate legal capacity for both parties.