When it comes to legal contracts, there are a few different types that businesses and individuals need to be aware of. One of these is known as a unilateral contract, and it is important to fully understand its definition and how it works.
A unilateral contract is a type of contract where one party makes a promise in exchange for a specific action or performance from another party. Unlike a bilateral contract, which involves promises from both parties, a unilateral contract is only binding if one party fulfills their end of the bargain.
An example of a unilateral contract is a reward for finding a lost item. If someone lost their dog and offered a reward for anyone who found and returned the dog, this would be a unilateral contract. The person who finds the dog is not obligated to return it, but if they do, they are entitled to the reward as specified by the contract.
Cornell Law School provides a more detailed definition of a unilateral contract, stating that it is a contract “in which only one party makes a promise that is enforceable, the promise in exchange for an act or performance by another party.” This means that the party making the promise is the only one who is legally obligated to follow through with their end of the agreement.
It is important to note that unilateral contracts can only be formed if the promise made is specific and clear. If the terms of the offer are too vague or ambiguous, it may not be considered a valid contract. Additionally, the action or performance required from the other party must be reasonable and attainable.
Overall, understanding what a unilateral contract is and how it works is important for anyone entering into a legal agreement. Whether you are offering a reward for finding a lost item or entering into a more complex business agreement, it is crucial to ensure that all terms are clear and reasonable in order to avoid any potential legal disputes.