What characterizes a bilateral contract?

A bilateral contract is characterized by the fact that both parties involved are legally obligated to perform their respective duties as outlined in the agreement. In this type of contract, each party makes a promise to the other, creating mutual obligations. For instance, in a real estate transaction, one party may agree to sell a property while the other agrees to pay a specified sum of money. This mutual exchange of promises is fundamental to bilateral contracts, distinguishing them from unilateral contracts, where only one party has an obligation.

In a bilateral contract, both parties have the right to enforce the agreement in court, should either party fail to uphold their side of the deal. This enforceability underlines the importance of mutual commitment in legal agreements, highlighting the expectations placed on both participants.

The other options do not accurately describe bilateral contracts. A scenario where only one party is obligated pertains to unilateral contracts; asserting a lack of enforceability contradicts the fundamental characteristics of legally binding agreements; while requiring a written agreement is not universally true for all bilateral contracts, as many can be valid verbally or through other forms of assent.