National Real Estate Practice Exam

A listing agreement is an example of which type of contract?

1. Unilateral Contract

2. Bilateral Contract

3. Customer Agreement

4. Management-Level License

The correct answer is: Bilateral Contract

A listing agreement is indeed classified as a bilateral contract because it involves mutual promises between two parties: the seller and the real estate agent (or broker). In this type of contract, the seller agrees to pay a commission to the agent in exchange for the agent's service of marketing and selling the property. Both parties have obligations — the seller must provide the property for sale, and the agent must engage in efforts to sell it. This mutual exchange of promises is what distinctly characterizes bilateral contracts; each party's performance is contingent upon the other fulfilling their part of the agreement. This contrasts with unilateral contracts, where only one party makes a promise that the other party can accept, but does not need to perform any action in return. In the context of a listing agreement, both parties are committed and obligated to their respective roles, which is why it is classified as bilateral. The other options, such as customer agreements and management-level licenses, do not accurately describe the nature of a listing agreement as they refer to different types of relationships or contracts in real estate.