Unilateral Contract

August 18, 2024 6 min read Law Contracts Unilateral Contract Contract Law Agreements Legal Terms Payments

A one-sided contract agreement in which an offeror promises payment after task completion.

On this page

Definition of Unilateral Contract

A unilateral contract is a one-sided agreement wherein an offeror makes a promise to pay or reward an offeree only after the completion of a specified task. This means the offeror alone holds the contractual obligation, while the offeree simply has the option to accept the offer by performing the task or action outlined in the contract. In the famous words of Shakespeare, “Neither a borrower nor a lender be,” but if you happen to come across a unilateral contract, remember that it’s best to get what you perform written on paper!

Unilateral Contract	Bilateral Contract
One party promises a payment only after the action is completed	Both parties make mutual promises
Only the offeror has a contractual obligation	Both parties have obligations
Acceptance occurs through the completion of the task	Acceptance occurs through mutual agreement
Common in reward situations (e.g., lost pet reward)	Common in sales or employment agreements

Examples of Unilateral Contracts

Lost Pet Reward: A person promises to pay $100 to anyone who finds their lost pet. The payment is made only when someone fulfills the task of finding the pet.
Contests or Prizes: A company runs a contest stating that if someone completes a specified challenge, they will receive a cash prize.
Insurance Policies: An insurance company agrees to provide payment (benefits) only if a covered event (like an accident) occurs.

Bilateral Contract: A mutual agreement wherein both parties promise to fulfill their obligations.
Offeror: The party that makes the offer in the contract.
Offeree: The party that has the option to accept the offer made by the offeror.

Fun Facts, Insights, and Historical Notes

Inspiration for Lawyers: Unilateral contracts are great motivators—particularly for happy dog owners looking to find their furry friends! 🎉
Historical Note: The concept of a unilateral contract dates back to ancient Roman law, showing that people have always understood the importance of promises (and rewards).
Necessary Motivation: Think of unilateral contracts as the ultimate “have your cake and eat it too” scenario—one side gets all the goodies after a little effort! 🍰

Frequently Asked Questions (FAQs)

Can a unilateral contract be revoked?
- Yes, a unilateral contract can be revoked before the offeree begins performance. However, once the offeree has started the task, the offeror is often bound.
Is consideration required in unilateral contracts?
- Yes, consideration is necessary, as the offeror’s promise must be accepted by performance of the task.
What happens if the task specified in a unilateral contract is impossible to perform?
- Typically, the contract may be deemed void due to the impossibility of fulfillment.

References for Further Study

Test Your Knowledge: Unilateral Contracts Quiz

## In a unilateral contract, who has the obligation to perform? - [x] The offeror - [ ] The offeree - [ ] Both parties - [ ] No one > **Explanation:** In a unilateral contract, only the offeror has the obligation to perform, as the offeree completes the task for a reward. ## Which is a common example of a unilateral contract? - [x] Reward for a lost pet - [ ] Job offer acceptance - [ ] Purchase agreement - [ ] Rental lease > **Explanation:** A reward for a lost pet is a classic example of a unilateral contract, since payment is promised contingent on the action of finding the pet. ## Can a bilateral contract also contain a unilateral obligation? - [x] Yes - [ ] No - [ ] Only if stated clearly - [ ] Only in some states > **Explanation:** A bilateral contract can contain unilateral obligations, depending on how the agreement is structured. ## When does a unilateral contract become binding? - [ ] Upon verbal acceptance - [ ] When the offeree begins the task - [x] After the task is completed - [ ] Once the offeror changes their mind > **Explanation:** A unilateral contract is binding on the offeror only after the offeree has completed the specified task. ## What type of contract requires exchange between two parties? - [ ] Unilateral Contract - [ ] Reward Contract - [x] Bilateral Contract - [ ] Lottery Contract > **Explanation:** A bilateral contract is defined by mutual exchange of promises between two parties. ## If someone offers you a reward for cleaning up litter in the park, what kind of contract is that? - [x] Unilateral contract - [ ] Bilateral contract - [ ] Implied contract - [ ] Void contract > **Explanation:** A reward for cleaning up litter is an example of a unilateral contract since compensation is given after the task. ## What would happen if the offeree refuses to perform the task in a unilateral contract? - [ ] They can still receive the payment - [ ] The contract remains intact - [x] There is no obligation for the offeror - [ ] They can sue for breach of contract > **Explanation:** If the offeree refuses to perform, the offeror has no payment obligation since the contract relies solely on the task's completion. ## Is a verbal agreement for a unilateral contract enforceable? - [x] Yes, if the terms are clear - [ ] No, all contracts must be in writing - [ ] Only in court-approved cases - [ ] It depends on the location > **Explanation:** A verbal agreement for a unilateral contract can be enforceable if the terms are clear and understood by both parties. ## In a unilateral contract, does the offeree need to communicate acceptance? - [ ] Yes - [ ] Only if requested - [x] No, performance of the task is acceptance - [ ] It depends on the offeror’s preference > **Explanation:** The offeree does not need to communicate acceptance; completing the task signifies their acceptance. ## In which situation would a unilateral contract NOT hold? - [ ] The offeror withdraws before the task is begun - [ ] The task is completed - [x] The task is illegal - [ ] The offeree notifies the offeror > **Explanation:** If the task is illegal, a unilateral contract cannot be upheld regardless of other factors.

Thank you for reading through our exciting exploration of unilateral contracts! Always remember, a promise made is worth its weight in gold… or at least in chocolate! 🍫 Until next time, keep those agreements fair!

Sunday, August 18, 2024