Bilateral Contract With Mutuality Of Obligation
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FAQ
What is the test for mutuality of obligation? The test for mutuality of obligation has two key elements that must be present: An employer is obliged to offer work to an individual, and. That individual is obliged to do the work offered.
Any sales agreement is an example of a bilateral contract. A car buyer may agree to pay the seller a certain amount of money in exchange for the title to the car. The seller agrees to deliver the car title in exchange for the specified sale amount.
Related Content. The obligation on the employer to provide work and the obligation on the employee to accept that work. This is a necessary feature of the relationship between an employer and an employee.
Definition. Mutuality of agreement is a legal principle that provides that unless both parties to a contract are bound to perform, neither party is bound to perform, i.e., the contract is void.
A bilateral contract is typically formed when there is an exchange of promise between two people serving as the consideration for the promise of the other party. The party making a promise is obliged to follow through with the promise. The party making a promise is the promisor and the other party is the promisee.
