In which type of agreement are two parties obliged to perform their promises?

A bilateral contract is characterized by a mutual exchange of promises where both parties are obligated to fulfill their respective commitments. This type of agreement creates a reciprocal obligation, meaning that when one party makes a promise, the other party agrees to perform their promise in return. For instance, in a sales agreement, the seller promises to deliver a product while the buyer promises to pay for that product.

In contrast, a unilateral contract involves only one party making a promise that is contingent upon the performance of a certain action by the other party. An example of this type of contract is a reward offer for finding a lost pet; the reward will only be paid if the pet is returned, which does not create an obligation for the finder to take any action.

Accessory contracts and suretyship are different concepts. Accessory contracts are those that rely on the existence of a principal obligation, such as loan guarantees or collateral agreements. Suretyship involves one party taking responsibility for the debt or obligation of another, but again, this does not create a mutual obligation like a bilateral contract does. Therefore, the clear definition and functionality of a bilateral contract as one that binds both parties to their promises make it the correct choice.