Which contract requires both parties to meet certain conditions for enforceability?

A contract that requires both parties to meet certain conditions for enforceability is known as a conditional contract. This type of agreement includes specific conditions or events that must be fulfilled before the contract becomes effective or binding. For example, in an insurance policy, coverage might begin only after the insured has paid the premium, which is a condition that both parties must fulfill.

In contrast, other types of contracts operate under different principles. A bilateral contract involves mutual promises where both parties commit to perform certain responsibilities; however, enforcement does not strictly depend on the occurrence of specific conditions. A unilateral contract involves a promise made by one party in exchange for an act by another party; here, only one party must fulfill their obligation for the contract to be effective, while the other party's action is based on choice. An adhesion contract is usually a standardized agreement drafted by one party, often seen in consumer contracts, which typically does not require both parties to meet conditions for enforceability, since it is more about acceptance of terms than mutual obligations.

Understanding these distinctions highlights why a conditional contract specifically requires both parties to act upon stipulated conditions for the agreement to be enforceable.