Unilateral Contract
A Unilateral Contract is a legally binding agreement in which one party (the offeror) promises a reward or payment upon completion of a specific action by another party (the offeree), with acceptance occurring solely through performance.
- AKA: One-Sided Contract, Offer-for-Performance Contract.
- Context:
- It can involve scenarios such as reward offers or service requests, where only the offeror is legally obligated to fulfill the contract if the action is completed.
- It can require performance as the sole means of acceptance, with no reciprocal promise needed from the offeree.
- It can apply to fields like law enforcement (e.g., reward for information) and business (e.g., insurance claims), where specified actions trigger the contract.
- It can be revoked by the offeror before the offeree begins the requested performance, subject to contract law restrictions.
- It can be distinguished from a Bilateral Contract where both parties agree to mutual obligations.
- …
- Example(s):
- A reward offer for information leading to a criminal’s capture, which requires the offeror to pay once the information is provided.
- A company offers a bonus to employees who meet a specific performance target, payable upon completion of the target.
- An insurance policy that promises payment to the policyholder if a certain event (e.g., accident or loss) occurs, contingent upon the policyholder's prior premium payment.
- …
- Counter-Example(s):
- A Bilateral Contract, which require both parties to exchange promises and bind each to perform certain obligations.
- An Implied Contract, where terms are established through actions or conduct rather than an explicit offer and performance requirement.
- A Mutual Agreement,
- An Employment Contract.
- See: Offer and Acceptance, Promissory Estoppel, Contractual Consideration, Bilateral Contract, Reward Offer, Insurance Policy, Legal Obligation.
References
2024
- (ChatGPT-OpenAI, 2024) ⇒ Prompt: Summarize the concept Unilateral Contract in 1- 2 paragraphs. ChatGPT (model:gpt-4o). Retrieved: 2024-11-02.
- QUOTE: A unilateral contract is a type of agreement in which one party, the offeror, makes a promise in exchange for the performance of a specific act by another party, the offeree. Unlike bilateral contracts, which involve mutual promises between two parties, a unilateral contract is characterized by the offeror being bound to fulfill their promise only when the offeree completes the requested act. In essence, the contract is accepted through action rather than a promise. Common examples of unilateral contracts include reward offers, where a person might promise to pay a reward for the return of a lost item or for information leading to the capture of a criminal.
The offeree is under no obligation to perform the act, and the contract is only formed if and when the offeree performs. This means the offeror cannot revoke the offer once the offeree has begun the performance. For instance, if a person begins searching for a lost pet in response to a reward offer, the offeror cannot withdraw the promise of the reward during the search. Unilateral contracts are often used in situations where the offeror is seeking a specific outcome and leaves it open to anyone willing and able to perform the act, thereby incentivizing individuals to act in exchange for the potential benefit.
- QUOTE: A unilateral contract is a type of agreement in which one party, the offeror, makes a promise in exchange for the performance of a specific act by another party, the offeree. Unlike bilateral contracts, which involve mutual promises between two parties, a unilateral contract is characterized by the offeror being bound to fulfill their promise only when the offeree completes the requested act. In essence, the contract is accepted through action rather than a promise. Common examples of unilateral contracts include reward offers, where a person might promise to pay a reward for the return of a lost item or for information leading to the capture of a criminal.
2024
- (Cornell Law School, 2024) ⇒ Wex Definitions Team (2024). "Unilateral Contract". In: Legal Information Institute (LII), Cornell Law School.
- QUOTE: A unilateral contract is a contract created by an offer that can only be accepted by performance.
In a unilateral contract, there is an express offer that payment is made only by a party’s performance. Common examples include reward offers or contests, where one party promises to pay or give a reward if the other party accomplishes a specific task. The offeror may revoke the offer before the offeree’s performance begins, typically requiring express revocation. Similar to contract law in general, specific guidelines on unilateral contracts are governed by state laws, rather than federal laws.
```
- QUOTE: A unilateral contract is a contract created by an offer that can only be accepted by performance.
2023
- (Young & Rasure) ⇒ Julie Young, and Erika Rasure (2023)."Unilateral Contract: Definition, How It Works, and Types". In: Investopedia.
- QUOTE: A unilateral contract is a one-sided contract agreement in which an offeror promises to pay only after the completion of a task by the offeree. In this type of agreement, the offeror is the only party with a contractual obligation. A unilateral contract differs from a bilateral contract in which both parties are bound by the agreement.
Key Takeaways:
- Unilateral contracts are one-sided, requiring only a commitment from the offeror.
- Unilateral contracts do not require the offeree to perform the requested task or act.
- Unilateral contracts are usually used to make optional offers.
- Bilateral contracts require an agreement between two parties and obligation on both sides
- QUOTE: A unilateral contract is a one-sided contract agreement in which an offeror promises to pay only after the completion of a task by the offeree. In this type of agreement, the offeror is the only party with a contractual obligation. A unilateral contract differs from a bilateral contract in which both parties are bound by the agreement.