What is a unilateral contract?

A unilateral contract is a legal agreement in which only one party makes a promise that can be accepted through performance. In this type of contract, one party agrees to do something in exchange for the other party's performance rather than a promise. The party making the promise is bound by the terms of the contract if the other party performs the specified action.

Understanding unilateral contracts

In a unilateral contract, the offeror is obligated to fulfill their promise only if the offeree completes the requested action. For example, if someone offers a reward for finding their lost pet, the contract becomes binding only when the pet is found. The offeree can choose whether or not to accept the offer by performing the required task.

Implications of unilateral contracts

Unilateral contracts are commonly seen in scenarios like contests, lotteries, and reward offers. It is essential to understand the terms and conditions of a unilateral contract before accepting it through performance, as they can create a legally binding agreement once the specified action is completed.