What is a characteristic of a unilateral contract?

What is a characteristic of a unilateral contract?

• A. It involves multiple parties exchanging promises
• B. Only one party promises to perform
• C. It must be written to be enforceable
• D. It requires consideration from both parties

Answer: (B)

A unilateral contract is defined by the fact that it involves only one party making a promise in exchange for a specific action or performance by another party. In this type of agreement, the second party is not obligated to fulfill a promise; rather, the first party is committed to delivering something or taking a specific action upon the completion of that action by the other party. For example, if someone offers a reward for the return of a lost pet, they are making a unilateral promise; they will pay the reward if someone finds and returns the pet. The person searching for the pet is not required to do anything, but if they do find the pet and return it, the promise becomes enforceable. This distinguishes unilateral contracts from bilateral contracts, where both parties exchange promises and are obligated to perform their respective parts. Options that imply mutual promises or requirements for written agreements do not describe unilateral contracts accurately; therefore, they do not reflect the defining element of this contractual type.

A unilateral contract is defined by the fact that it involves only one party making a promise in exchange for a specific action or performance by another party. In this type of agreement, the second party is not obligated to fulfill a promise; rather, the first party is committed to delivering something or taking a specific action upon the completion of that action by the other party.

For example, if someone offers a reward for the return of a lost pet, they are making a unilateral promise; they will pay the reward if someone finds and returns the pet. The person searching for the pet is not required to do anything, but if they do find the pet and return it, the promise becomes enforceable.

This distinguishes unilateral contracts from bilateral contracts, where both parties exchange promises and are obligated to perform their respective parts. Options that imply mutual promises or requirements for written agreements do not describe unilateral contracts accurately; therefore, they do not reflect the defining element of this contractual type.