The contract between the principal broker of an office and the sales agents is typically classified as which type of contract?

The contract between the principal broker and the sales agents is classified as a bilateral contract because both parties involved make promises to one another. In this context, the principal broker typically agrees to provide resources and support to the sales agents, while the sales agents agree to perform specific duties, such as representing clients in real estate transactions and complying with the policies set by the broker.

In a bilateral contract, each party's obligations are clearly defined, and both parties are bound to fulfill their respective promises. This leads to a mutual exchange of value, which is fundamental in real estate practices where brokers rely on agents to generate business and agents rely on brokers for guidance and resources. This mutual exchange distinguishes bilateral contracts from other types, such as unilateral contracts, where only one party makes a promise, and fulfilling that promise depends solely on the actions of the other party.