In a bilateral contract, what is exchanged between the parties?

In a bilateral contract, the exchange between the parties consists of promises made by each party to fulfill certain obligations. This mutual promise is at the core of a bilateral contract, distinguishing it from unilateral contracts where one party makes a promise in exchange for an act by the other party. For instance, in a typical real estate transaction, one party may promise to sell a property while the other party promises to pay a certain amount in return. This mutual commitment is fundamental to the formation of the contract, making it binding.

While consideration, which refers to something of value exchanged in a contract, is indeed present in bilateral contracts, the answer specifically identifies the nature of the exchange as promises. Rights are often involved as well, but they pertain more to the benefits that parties derive from the contract, rather than what is actively exchanged. Liquidated damages are a specific provision that might apply if there is a breach, but they do not represent the foundational aspect of what is exchanged in a bilateral contract.