What is a unilateral contract?

A unilateral contract is defined as a promise made in exchange for an act. This means that one party makes a promise, and the other party’s acceptance of that promise occurs through their performance of the requested act. In this type of contract, only one party is obligated to fulfill their promise, while the other party’s obligation is created only through the completion of the specified act.

For instance, in a unilateral contract, if someone offers a reward for the return of a lost dog, the promise of the reward is contingent upon the action of returning the dog. The person who offers the reward has made a unilateral promise, and the other party (the one who might find and return the dog) accepts the offer not by making a promise in return, but by completing the action of returning the dog.

This concept is essential to understanding how different types of contracts operate in real estate and other legal frameworks. In contrast, other types of contracts involve promises made mutually between parties or entail reciprocal duties, which differentiates them from unilateral contracts.