What is the difference between executory and bilateral contract?

Dear Student,

Executory Contract: A contract where both the parties are yet to perform their obligation in the future is called an executory contract.

Example: An offer of sale of car in the coming month for Rs 1,00,000 by Aryan to Narayan is an executory contract as both Aryan and Narayan are still to perform the agreed obligations.

Bilateral Contract: A bilateral contract is one in which both the parties make promises on each other and have to perform their respective promises or obligations. It can be considered as an arrangement where both the parties exchange a set of promises to perform an act for the other party.

Example: Potu promises to sell his bike to Motu for Rs 10,000 cash down, but Motu pays only Rs 5,000 as earnest money and promises to pay the balance the next Sunday. On the other hand, Potu gives the possession of bike to Motu and promises to execute a sale deed on receipt of full amount. The contract between Potu and Motu is a bilateral contract because something remains to be done on both sides.

It must be noted that bilateral contracts are the same as executory contracts.

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