Alabama Real Estate Practice Exam

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Prepare for the Alabama Real Estate Exam. Utilize flashcards and multiple-choice questions, each coupled with hints and explanations. Ace your upcoming test!

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What is a characteristic of a bilateral contract?

Only one party is bound by the contract
It involves exchange of promises to perform actions by both parties
Cannot be legally enforced
Is always related to employment agreements

The correct answer is: It involves exchange of promises to perform actions by both parties

A bilateral contract is a type of contract where both parties involved are bound by the terms and obligations outlined in the agreement. This means that both parties have made mutual promises to perform certain actions or fulfill certain obligations. Option A is incorrect because in a bilateral contract, both parties are bound, whereas in a unilateral contract, only one party is bound. Option C is incorrect because a bilateral contract can be legally enforced as both parties have agreed to the terms. Option D is incorrect because a bilateral contract can apply to a variety of agreements, not just employment agreements.