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Bilateral or unilateral contracts Essay

The Law of Contract can be defined as an agreement containing a promise or promises which can be enforceable by law. Sir John William Salmond a legal scholar defined a contract as “an agreement creating and defining the obligations between two or more parties”. A contract may be in any two kinds either bilateral or unilateral depending on the whether both or one party makes a promise or promises. Where both parties to the contract make a promise or promises, then the contract is referred to as a bilateral contract.

Bilateral is the most common kind of contract in business. Both parties are bound together at an exact time, this is also referred to as mutuality of understanding. The bilateral one is quite normal compared to unilateral and creates a mutual contraction obligation from the start. (Buckley 1996, 10). Bilateral contract can be explained in the case of Thornton v. Shoe Lane Parking. Francis Thornton a professional musician had a one day job at Farringdon Hall in Central London. He was to entertain in the BBC with his trumpet.

The plaintiff had chosen to leave his car just close to where he was performing in a newly opened multy-storey car park in Shoe Lane near Fleet Street. He drove up, switched the button and got a ticket. When the barrier opened, he parked his car inside the car park. His appointment lasted for three hours after which he returned. An accident occurred as the defendant was loading some goods in his car. The plaintiff later sued Lane Parking Ltd for damages on his car and for the injuries he sustained.

Mr. Thornton was compensated $3,637 for the injuries sustained but non for the car. It was found that he had 50% contributory negligence (Buckley, 2005, 7). The major issue in this case was if any attempts were made by the defendant to exclude liability both to the plaintiff and his car. Altogether the defendant had made some attempts; the ticket processed from the machine, the sign displayed outside the park and a notice inside the park excluded liability to the car.

The rule provided that the terms that can be brought to the parties in the contract are those that occurred at the exact time or before the formation of the contract (Collins, 1999, 23). A contract is said to be unilateral when the promise is only from one party. The other party does not make any promise but only does the act in order to achieve the other parties promise. An example of such a case is where Peter promises to pay Tony $70’000 if Tony finds his cat. Tony is not under any obligation to find the cat but Peter is obliged to pay Tony incase Tony finds the cat.

An offer of a unilateral contract can be made ‘to the world’ in form of advertisement. In such situations acceptance will be deemed to have occurred on the fulfillment of the condition. An example of a unilateral contract is the insurance contracts. Unilateral contract can be explained in Carlil v. Carbolic Smoke Ball Co. Ltd, the defendant through an advertisement made a promise to pay $100 to any user of Carbolic Smoke who during a usage period of two weeks contracts influenza. Mrs. Louise Carlil was infected after using the defendant’s product.

She sued Carbolic Smoke Ball for $100 as promised (Cheesman, 2003, 34). Works Cited Buckley Francis. Just Exchange: a Theory of Contracts. London: Routledge, 2005, pp7 Buckley J. Peter. Firms, Organizations and Contracts: A Reader in Industrial Organization. Oxford: Oxford University Press, 1996, pp10 Cheesman Henry. Contemporary Business and E-commerce Law: Custom Edition for Collins Hugh. Regulating Contracts. Oxford: Oxford University Press, 1999, pp. 23 Students in Arts. New York: Pearson Custom Publishing; 2003, 4th Edition, pp. 34


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