Which type of contract involves commitments made by both parties?

Bilateral contracts involve commitments made by both parties. In the context of insurance, when both the insurer and the insured enter into a contract, each party is obligated to fulfill specific duties. For example, the insurer agrees to provide coverage in exchange for the insured's payment of premiums. This mutual agreement differentiates bilateral contracts from other types, such as unilateral contracts, where only one party makes a promise or commitment.

Conditional contracts, while they contain promises, are contingent upon certain conditions being met rather than involving mutual commitments. Oral contracts refer to agreements made verbally, which can still be bilateral, but the distinguishing factor in this question is the specific nature of the commitments made by both parties. Hence, the recognition of bilateral contracts is pivotal in understanding the framework of obligations in personal lines insurance agreements.