Parisi, Francesco; Cenini, Marta; Luppi, Barbara --- "Enforcing bilateral promises: a comparative law and economics perspective" [2017] ELECD 608; in Monateri, Giuseppe Pier (ed), "Comparative Contract Law" (Edward Elgar Publishing, 2017) 145

Book Title: Comparative Contract Law

Editor(s): Monateri, Giuseppe Pier

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781849804516

Section: Chapter 7

Section Title: Enforcing bilateral promises: a comparative law and economics perspective

Author(s): Parisi, Francesco; Cenini, Marta; Luppi, Barbara

Number of pages: 28

Abstract/Description:

Legal systems use different and often conflicting terminology to refer to a situation where the parties to a contract exchange promises, creating mutual obligations to be fulfilled at a later time. Common law systems refer to these situations as bilateral contracts. The original Restatement on Contracts, section 12, defined a bilateral contract as one in which there are mutual promises between two parties to the contract and where each party is both a promisor and a promisee; in other words, an agreement where the parties exchange promises of performance (rather than actual performances) with one another. In bilateral contracts, the offer of one party calls for a promise by the other party. Acceptance usually takes the form of a communication by the offeree of his counter-promise; the exchange is said to be executory and not already executed (executory consideration). Each party is obliged to some act or forbearance, which, at the time of entering into the contract, will take place in the future. On the contrary, ‘unilateral contract’ means a contract where the offer calls for an act and not for a counter-promise and the promisee does not undertake any obligation until that moment. The original Restatement defined a unilateral contract as one in which a promisor receives an actual performance, put differently, a promise of future performance is made in exchange for an actual present performance.