In legal terms, a unilateral contract is an agreement between two parties where one party makes a promise in exchange for performance by the other party. In this type of contract, the consideration for each promise is a return promise. In simpler terms, one party offers something in exchange for an action or performance by the other party, but the offeror is not bound to perform until the offeree has completed the agreed-upon action.
A unilateral contract is often used in situations where one party wants to obtain a specific result but cannot do so alone. For example, a business may offer a reward to anyone who provides information that leads to the arrest and conviction of a burglar. By making this offer, the business is creating a unilateral contract. The consideration for the promised reward is the information provided by the person who reports the crime. In this case, the reward is not owed until the information is provided, and the offeror is not obligated to pay it unless and until the reported information is true and accurate.
Another common example of a unilateral contract is a contest or competition. In these cases, there is often a cash prize or some other reward offered to the winner. The entrants must perform some action or complete a specific task to be eligible for the reward. The consideration for the promised reward is the completed task or action performed by the entrant. Again, the offeror is not obligated to pay the reward unless and until the task is completed and verified.
In a unilateral contract, the offeree is not required to accept the offer. However, if they do accept, they are bound to perform the agreed-upon action. Once the offeree has completed the action, the offeror is bound to fulfill their promise. If the offeree does not perform the action, the offeror is not obligated to provide the reward.
In conclusion, a unilateral contract is an agreement where one party promises to perform a specific action in exchange for a return promise from the other party. This type of contract is commonly used for rewards, contests, and competitions. The key feature of a unilateral contract is that the consideration for each promise is a return promise, and the offeror is not obligated to perform until the offeree has completed the agreed-upon action. As a professional, it is important to understand the legal terminology used in contracts in order to communicate effectively with legal professionals and accurately convey information to readers.