What are a Unilateral Contract and Mutual Contract?

A contract typically will be executed amid two parties who are legally qualified to enter and execute a contract. A contract once executed will be binding on the persons/companies who are parties to the contract.

An executed contract can be unilateral or mutual contract based on the application of the terms and conditions of the contract on the parties.

Unilateral Contract: A contract which will impose duties and obligations on one party to the contract on unilateral basis then such contract will be termed as a unilateral contract.

Mutual Contract: Contract which will inflict the duties and obligations on parties on equal footing with one another will be a mutual contract.

Illustrations to clearly reflect a unilateral and mutual application of provisions:

Assignment:

Case 1: Customer shall not assign the Agreement without the prior written consent of the Supplier.

Case 2: Each party shall not assign the Agreement without the prior written consent of other party.

Publicity:

Case 1: Supplier shall not use the Customer name in any publicity related acts without prior written consent of the Customer.

Case 2: Each Party shall not use the other party name in any publicity related acts without prior written consent of the other party.

Confidentiality provision:

Case 1: Licensor shall not use and disclose the confidential information of the Licensee for any purpose other than the purpose expressly mentioned in the Agreement.

Case 2: Each party shall not use and disclose the confidential information of the other party for any purpose other than the purpose expressly mentioned in the Agreement.

Case 1 is the illustrations for the unilateral application of a provision. Case 2 stands as the illustration for the mutual application of a provision.

Most of the standard contract templates will have unilateral application on the counter party. Unilateral contracts will also be termed as one sided contracts.

Law students and Professionals who are keen to learn the contract drafting should learn the distinction amid the unilateral and mutual application of the contracts.

Learning this distinction amid the unilateral/mutual contracts will provide the drafting person with the clear vision of drafting a contract on unilateral/mutual basis depending upon the client requirements.