A unilateral contract is a type of contract where one party makes a promise in exchange for the performance of a specific act by the other party. In a unilateral contract, the offeror is the only party with a contractual obligation, and the contract is only formed and legally binding once the offeree performs the requested act as per the offerors terms. Here are some key features of a unilateral contract:
- The contract is created by the offeror/promisor.
- Only the offeror is legally bound.
- The offeree is not obliged to act upon the offers made via unilateral contracts.
- The contract is only enforceable once work has begun.
- Payment is only made on completion.
Examples of unilateral contracts include reward contracts, insurance policies, and open requests. In a reward contract, for instance, someone offers a reward for returning a lost pet, and the person offering the reward makes a unilateral offer: If someone finds and returns the lost dog, they receive it.
