Multilateral Contract Legal Definition
The multilateral contract legal definition is an agreement between multiple parties. All parties comprise the obligator, the person who is bound to the other.3 min read
The definition of a multilateral contract legal definition is an agreement between multiple parties. A bilateral agreement entails a reciprocal deal between two parties where each one promises to perform a service or act in return for a monetary award or some other arrangement. Bilateral agreements are the most common types of agreements; this type of arrangement is usually one that comes to mind for many people. All parties comprise the obligator, which is the person who is bound to the other. Each party is bound via promise, and the obligee is the person who is bound to the other.
For the agreements to be legally binding, the parties must have some type of record stating that all parties involved have agreed to the terms. This usually takes the form of a contract that’s signed. Take note of the following examples of bilateral contracts.
- You enter a favorite store and purchase an item
- You order meals at a fast food restaurant
- You get treatment from a doctor
- You check out a novel from your library
In every instance, you had promised an action to another individual or party in response to another person’s action. Bilateral agreements are some of the most common contract types. One notable example comprises a contract of sale. If we’re talking about houses, for instance, the home buyer wants to pay a seller a certain sum of money in return for a title to the house. Then, the house seller agrees to give the title in return for the stated sale price.
If any party does not finish their part of the bargain, that person is in violation of the agreement. Business agreements are usually bilateral in almost all cases. All businesses usually provide a type of service or product in return for monetary compensation, and most companies usually enter into bilateral agreements with the following parties:
Employment agreements, where a business promises to pay employees a certain sum for a completed a task, are also called bilateral agreements.
The simplest way to define a unilateral business agreement is through the analyzation of the word “unilateral.” Under contract law, unilateral agreements only allow a single person to make an agreement or promise. You may see unilateral contracts in the form of a reward agreement.
For example, you post a $500 reward around town for someone to return your lost dog. If someone returns your dog, you must give the finder $500. If not, you would be in violation of a unilateral contract.
Unilateral agreements begin where one party drafts a single contract for any party to enter. The party who delivers on the contract enters an arrangement with the person who drafted the agreement. Another separate contract is another unilateral agreement. Under an insurance agreement, the insurance company agrees to pay any person whose vehicle gets damaged by the insurance policyholder. If an accident never occurs, the insurance company does not have to pay.
Both bilateral and unilateral agreements may be breached as well. Consider the term “breach” that’s synonymous with the word “break.” This means that a contract breach may be defined as a broken agreement, deriving from the failure to honor any contract term without a justifiable excuse. One example of a broken unilateral contract could be a scenario where a person that promises to pay in exchange for a completed act, flat out refuses.
If you offer $500 for the dog, but do not pay because you believe that the person who returned your pet stole it, you would still be in violation of the contract.
Bilateral agreements may also be breached. A bilateral agreement may be broken if a coworker refuses to finish his or her end of the job. When the employee does something that’s prohibited by the agreement, or even when a customer stops the person from honoring the obligation of completing a project, the employee is still in violation.
Proving Your Case
You also must prove the same attributes if you decide to enforce a unilateral or bilateral agreement in court. In each scenario you need to prove the following:
- The agreement was broken
- The agreement existed
- You suffered a loss of some type
- The person you’re holding accountable is responsible
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