What distinguishes a bilateral contract from a unilateral contract?

A bilateral contract is characterized by the presence of mutual promises between the parties involved. In this type of contract, each party commits to fulfill a specific obligation, effectively creating a reciprocal agreement where both sides are bound to perform as promised. For instance, in a typical sales agreement, one party agrees to deliver a product while the other agrees to pay a certain price, illustrating this mutual commitment.

In contrast, a unilateral contract consists of only one promise, where one party makes a commitment that the other party can accept by performing a specific act. A common example is a reward offer; the person offering the reward promises to pay if someone returns a lost item, but the promise does not bind the individual to take any action unless they decide to claim the reward.

The other choices describe misunderstandings about contract types: bilateral contracts are indeed enforceable, but so are many unilateral contracts in appropriate circumstances, and both types of contracts can be legally binding. Additionally, not all unilateral contracts require written documentation; the requirement for writing typically depends on the subject matter and jurisdiction, not the nature of the contract itself.