What type of contract is formed when Cheryl promises to pay Paul $3,000 for plumbing installation by July 1?

The scenario describes a bilateral contract because it involves a mutual exchange of promises between two parties. In this case, Cheryl makes a promise to pay Paul $3,000, while Paul is implicitly promising to perform the plumbing installation by the specified date of July 1.

In a bilateral contract, both parties have obligations: Cheryl is obligated to pay the money, and Paul is obligated to complete the plumbing work. The essence of a bilateral contract lies in the mutuality of obligations, where each party is both a promisor and a promisee.

Other types of contracts mentioned do not apply here; for instance, a unilateral contract would involve one party making a promise in exchange for an act from another party, without mutual promises made. A void contract would imply that it lacks legal enforceability, which is not the case here since the agreement is clear and enforceable. An implied contract, on the other hand, typically arises from actions or circumstances rather than explicit promises, which does not align with the situation presented. Thus, the correct designation of this contract is as a bilateral contract.