Dual Contract Law and Legal Definition

Dual contract refers to a contract between parties who have made two contracts for the same transaction. Sometimes one contract may be used to defraud another (such as a lender) as to the terms of the parties' actual agreement. This is an illegal or unethical practice of providing two different contracts for the same transaction. Most often, the contract for larger amount is used to apply for a loan and the real contract is for a lower amount.