Bilateral vs Unilateral Contract
A bilateral contract is a promise for a promise; a unilateral contract is a promise in exchange for an act.
In a bilateral contract, both parties make promises, such as a listing agreement where the seller promises to pay and the broker promises to market the property. In a unilateral contract, one party promises to perform only if the other party acts.
An option contract is unilateral: the seller is bound to sell if the buyer exercises the option, but the buyer is not obligated to buy.
Do not carry that straight over to the Texas option period. The termination option in Paragraph 5B of the TREC One to Four Family Residential Contract sits inside a bilateral purchase contract the buyer has already signed. The buyer is obligated to buy, subject to a paid right to terminate, so the contract as a whole is bilateral.
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This definition is Texas real estate exam-prep education, not legal, tax, or professional advice. Verify current rules against the official source before relying on them for a real transaction. Back to the full glossary.