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

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

• A. Unilateral contract
• B. Bilateral contract
• C. Commutative contract
• D. Conditional contract

Answer: (B)

In the context of agreements where the performance of obligations by each party is directly related to the performance of the other, the term that appropriately describes this relationship is a bilateral contract. In a bilateral contract, both parties make promises to each other, intending to fulfill their respective obligations. For example, if one party agrees to deliver goods while the other agrees to pay for them, each party's performance reinforces the expectation of performance by the other. Understanding the nature of bilateral contracts is essential in title insurance practice, as they often govern the relationships in transactions, such as those involving purchases or agreements related to property. This allows all parties involved to have a clear understanding of their responsibilities and expectations, thus minimizing disputes and providing protection under title insurance policies. The other terms mentioned (such as unilateral, commutative, or conditional contracts) do not accurately capture this specific mutual obligation dynamic characteristic of bilateral contracts. Each of them has distinct definitions and applications that do not apply in the scenario described.

In the context of agreements where the performance of obligations by each party is directly related to the performance of the other, the term that appropriately describes this relationship is a bilateral contract. In a bilateral contract, both parties make promises to each other, intending to fulfill their respective obligations. For example, if one party agrees to deliver goods while the other agrees to pay for them, each party's performance reinforces the expectation of performance by the other.

Understanding the nature of bilateral contracts is essential in title insurance practice, as they often govern the relationships in transactions, such as those involving purchases or agreements related to property. This allows all parties involved to have a clear understanding of their responsibilities and expectations, thus minimizing disputes and providing protection under title insurance policies.

The other terms mentioned (such as unilateral, commutative, or conditional contracts) do not accurately capture this specific mutual obligation dynamic characteristic of bilateral contracts. Each of them has distinct definitions and applications that do not apply in the scenario described.