A unilateral contract is a type of legal agreement in which one party makes a promise or offers to do something in exchange for a specific action or performance by another party. Unlike a bilateral contract, which involves mutual promises between two parties, a unilateral contract only requires one party to make an offer or promise.
In a unilateral contract, the party making the promise or offer is known as the “offeror,” while the party being asked to perform the required action is known as the “offeree.” The offeror promises to perform a specific action or provide a certain benefit if the offeree completes the requested task or meets the required conditions.
For example, let`s say a company offers a reward of $100 to anyone who finds and returns a lost item. This is an example of a unilateral contract because the company is only obligated to pay the reward if someone finds and returns the item, while the person who finds the item is not obligated to do anything beyond returning it.
One of the key characteristics of a unilateral contract is that the offeror is free to revoke the offer at any time until the offeree has completed the required action or performance. Once the offeree has performed the required task, the contract becomes binding, and the offeror is legally obligated to fulfill their promise.
In some cases, a unilateral contract may be implied rather than formally stated. For example, a store that offers a “satisfaction guarantee” may be creating an implied unilateral contract with its customers, promising to provide a refund or replacement if the customer is not satisfied with their purchase.
In conclusion, a unilateral contract is a legal agreement in which one party makes a promise or offer that is only binding once the other party has completed a specific action or performance. This type of contract is common in situations where one party is offering a reward or benefit in exchange for a specific result or outcome. As with any legal agreement, it is important to carefully review and understand the terms of a unilateral contract before entering into it.