Which type of contract arises when a promise is made in exchange for a return promise?

A bilateral contract arises when a promise is made in exchange for a return promise. This means that both parties involved in the contract are making commitments to each other. For example, in a bilateral contract, one party might agree to deliver goods while the other party agrees to pay for those goods. This mutual exchange of promises creates a binding agreement, as both sides have explicit obligations to fulfill.

The characteristics of bilateral contracts distinguish them from other types. A unilateral contract, on the other hand, involves one party making a promise that is contingent on the other party performing a specific act, without the necessity of a return promise. In contrast, expressed contracts are formed through explicit agreements, which could be either bilateral or unilateral, while implied contracts are established through the actions or conduct of the parties involved rather than through formal promises. Thus, understanding the nature of the exchange of promises is key to recognizing why a bilateral contract is the correct answer.