When the performance of the obligation of each party is correlative to the performance of the other, this is called a:

In the context of contracts, when the performance of the obligation of each party is correlative to the performance of the other, the correct term to describe this relationship is a bilateral contract. In a bilateral contract, both parties exchange mutually dependent promises, meaning that the obligations are intertwined; each party's commitment is contingent upon the fulfillment of the other's promise.

For instance, in a typical real estate transaction, one party may agree to transfer property ownership while the other party agrees to pay a specified price. The obligation of the seller to convey the property and the obligation of the buyer to pay a price are interrelated, making it a classic example of a bilateral contract.

The terms listed in the other options – unilateral, commutative, and conditional contracts – describe different types of agreements or relationships and do not apply to the correlative performance characteristic defined in the question. A unilateral contract involves a promise in exchange for a specific act and does not require the performance of a promise by both parties. A commutative contract typically refers to contracts where the performances are of equal value but does not necessarily imply the correlative performance aspect. A conditional contract is one where obligations depend on the occurrence of a particular condition, which is not directly relevant to the correlative