unilateral contract
Noun: A unilateral contract is a legally binding agreement in which one party (the offeror) makes a promise to pay or provide something only if the other party (the offeree) performs a specific, requested act. The contract is formed not by a promise from the offeree, but by the offeree's actual completion of the act. The offeror is obligated to fulfill their promise only upon the act's completion.
A unilateral contract is used when an offer is made to the public or a specific party, requesting an action rather than a return promise. The performing party accepts the offer through conduct, not words. - The offeror's promise is conditional on full performance. - The offeree is not obligated to begin or complete the act, but if they do complete it, the offeror must pay.
- Reward Offers: "A unilateral contract was created when the company promised a reward for the return of its lost documents, and someone found and returned them."
- Contests: "The lottery advertisement formed a unilateral contract; participants accepted by submitting a ticket, and the organizer promised to pay the winner."
- Insurance Policies: "An insurance policy is often a unilateral contract; the insurer promises to pay for covered losses if the policyholder pays the premiums (the completed act)."
- Revocation of Offer: In many jurisdictions, an offer for a unilateral contract can be revoked at any time before the offeree begins or completes the requested performance. However, once performance has substantially begun, some courts hold the offer becomes irrevocable.
- Distinction from Bilateral Contract: This contrasts with a bilateral contract, where both parties exchange promises at the outset (e.g., "I promise to pay you if you promise to paint my house").
- Bilateral Contract (n): An agreement formed by an exchange of promises between two parties, where each promise is consideration for the other.
- Offer (n): A promise conditional on an act, return promise, or forbearance, which creates the power of acceptance.
- Acceptance by Performance (n): The method of accepting an offer for a unilateral contract by completely performing the requested act.
- One-sided contract
- Conditional promise
- "Open offer": An offer made to the public, typically for a unilateral contract, such as a reward.
- "Performance completes acceptance": A legal principle stating that in a unilateral contract, acceptance is effected only by full performance of the requested act.
- a one-sided agreement whereby you promise to do (or refrain from doing) something in return for a performance (not a promise)