Bilateral Contract: Meaning and Template (UK)

Updated on 13 August 2026

"Bilateral contract" is a legal category, not one specific document: it describes any contract where both sides promise to do something — one side's promise to pay, for example, in exchange for the other side's promise to deliver goods or perform a service. That's most contracts. It's the opposite of a unilateral contract, where only one party makes a promise (a reward offer, for instance, which the other side accepts only by actually doing the requested act — the classic English example being a company offering a reward for anyone who used its product as directed and still fell ill).

The widely circulated US free version of this document takes the concept query and turns it into one specific, thin sale-of-goods contract with a hard-coded Buyer/Seller structure, no termination or breach remedy beyond the seller withholding delivery, and a malformed interest clause. If you actually need a two-party agreement for a specific purpose — a sale, a service, a barter, a lease — use the specific template for that: it will fit better and this page links to each one below. This page explains the concept and gives a general-purpose two-party agreement for when no more specific template fits.

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General Agreement

This Agreement is made on between ("Party A") and ("Party B").

1. Subject Matter

This Agreement concerns the following: .

2. Compensation

Party A shall pay Party B by , via .

3. Delivery or Performance

4. Late Payment Interest

Any amount not paid when due shall accrue interest at % per annum from the due date until paid, without prejudice to any statutory right to interest that may separately apply.

5. Breach and Cure

If either party materially breaches this Agreement, the non-breaching party shall give written notice, and the breaching party shall have days to cure the breach.

6. Termination

If a material breach is not cured within the period stated above, the non-breaching party may terminate this Agreement and pursue any remedy available at law, including damages.

7. Force Majeure

Neither party is liable for delay or failure to perform (other than an obligation to pay money already due) caused by an event beyond that party's reasonable control, including acts of God, war, government order, or industrial action.

8. General

This Agreement is governed by the law of , constitutes the entire agreement between the parties, and may be amended only in writing signed by both parties. If any provision is held unenforceable, the remaining provisions remain in effect.

Party A

Date:

Party B

Date:

Bilateral vs. unilateral, in practice

In a bilateral contract, both sides are bound the moment the contract is formed: a signed sale agreement binds the buyer to pay and the seller to deliver from the moment both sign. In a unilateral contract, only one side makes a binding promise, and the other side accepts by performing the requested act rather than by promising anything in return. The leading English illustration is Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256, where the company's advertised promise of a reward to anyone who used its product as directed and still caught influenza was held to be a unilateral offer, accepted by the claimant's performance of the conditions rather than by any promise back to the company. Most real-world commercial agreements — sales, services, leases and employment — are bilateral.

Scots law has a distinct third category worth knowing about

England requires consideration for a contract to be binding, which is part of why the bilateral/unilateral distinction matters there. Scots law is different: it recognises a unilateral gratuitous promise as binding without any consideration or acceptance at all, provided it's clearly intended to have legal effect — a feature English law doesn't have. If your document sits on the Scottish side of the border and involves a one-sided undertaking rather than an exchange, that Scots-law promise doctrine may be the more accurate frame than "unilateral contract" in the English sense.

A concept query needs cross-links, not one thin document

Someone searching "bilateral contract" is very often trying to find out what the term means, or looking for a general two-party agreement template because they haven't found the specific one they need yet. This page answers the concept question directly and links to the specific family that actually fits: a sale of goods, a service engagement, a barter, or an amendment to an existing contract — each of those is a bilateral contract in the legal sense, drafted for its actual subject matter rather than left generic.

Clause-by-clause guide (general agreement)

Parties and subject matter: Identifies both parties and what the agreement is actually about — described specifically, not left blank.
Compensation: The amount payable, when it's due, and the payment method.
Delivery or performance: When and how the non-monetary side of the exchange is delivered or performed.
Late payment interest: A stated interest rate with a clear annual basis, applied to any payment made after it's due.
Breach and cure: A stated cure period before either party can terminate for the other's breach.
Termination: The right to terminate for an uncured material breach, and what happens to amounts already paid or delivered.
Force majeure: Excuses delay caused by events genuinely beyond a party's control, but not the underlying payment obligation.
General provisions: Entire agreement, severability, amendment in writing, notices, and governing law.

UK notes

This is a general-purpose agreement, not a substitute for a specific contract type where one exists.

Use the specific template if one fits
A sale of goods, a service agreement, a lease, a barter and an amendment are all bilateral contracts, each with their own standard terms — use the specific family for that subject matter rather than this general agreement whenever one exists.
Statutory late-payment interest may apply to B2B debts
Under the Late Payment of Commercial Debts (Interest) Act 1998, a business supplying goods or services to another business is generally entitled to statutory interest on a late payment unless the contract sets its own substantial remedy for late payment — check whether the statutory rate would apply if this agreement is silent or sets a lower one.
Late Payment of Commercial Debts (Interest) Act 1998

How to use this template

Check whether a more specific template fits first. If this is a sale, a service engagement, a lease, or a barter, use that specific template instead — it's drafted for the actual subject matter.
Describe the subject matter clearly. State specifically what each party is agreeing to do — don't leave it as a placeholder.
Set the payment and delivery terms. Enter the amount, due date, payment method, and delivery or performance terms.
Set the cure period and interest rate. Enter how long a party has to cure a breach, and the late-payment interest rate.
Sign and download. Both parties sign, then download a clean Word or PDF file — no sign-up, no watermark.

Frequently asked questions

What is a bilateral contract, in plain terms?

A contract where both sides promise to do something — most contracts are bilateral. It's contrasted with a unilateral contract, where only one side makes a binding promise and the other side accepts by actually performing an act rather than promising anything back.

Is a bilateral contract the same as a mutual contract?

Yes — "bilateral" and "mutual" describe the same idea: both parties have binding obligations to each other under the same contract.

What's an example of a unilateral contract, for comparison?

Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256 is the classic English example: an advertised reward, accepted not by a promise back but by actually performing the stated conditions.

Does Scots law treat this differently?

Yes, in one important way — Scots law recognises a unilateral gratuitous promise as binding without consideration or acceptance, which English law does not. If you're dealing with a one-sided undertaking under Scots law, that doctrine may be more relevant than the English unilateral/bilateral framing.

Do I need this specific template, or a more specific one?

Almost always a more specific one. If you're selling goods, hiring a contractor, leasing property, or bartering, use that specific template — it's drafted for the actual subject matter and legal issues involved. Use this general agreement only when nothing more specific fits.

What happens if one party doesn't pay on time?

Under this template, late-payment interest accrues at the stated rate, and if the non-payment isn't cured within the stated cure period, the other party can terminate the agreement for material breach. A business-to-business debt may also carry statutory interest under the Late Payment of Commercial Debts (Interest) Act 1998.

Can this template be used for a consumer contract?

It's written as a general commercial agreement. A consumer contract carries additional statutory protections under the Consumer Rights Act 2015 that this general template doesn't include — use a consumer-specific template or advice for that situation.

Related templates

Disclaimer

This template and guide are for general information only and do not constitute legal advice. This is a general-purpose agreement; a more specific template exists for most common transactions and should be used instead where it fits. Scots law differs from English law on unilateral promises — confirm the position that applies to your situation before relying on this agreement.