What type of contract involves two promises where both parties are bound to act?

A bilateral contract involves two promises made by two parties, where each party is obligated to perform their respective duties. This type of contract creates a mutual agreement that binds both parties to fulfill their obligations. For instance, if one party promises to deliver goods and the other promises to pay for those goods, both parties have made a promise to each other, thereby creating a bilateral contract.

The other types of contracts listed do not feature mutual promises in the same way. A unilateral contract involves a promise made by one party in exchange for a specific action by another party, meaning only one party is bound until the action is performed. An executed contract refers to a contract that has been fully performed by all parties, and an implied contract is formed by the actions or conduct of the parties rather than written or spoken words, lacking the mutual promises inherent in a bilateral contract.