What does it mean if a contract is unilateral?

A unilateral contract is characterized by the fact that only one party makes a legally binding promise. In such agreements, the other party does not have any obligation to perform unless they choose to take specific actions that would complete the terms of the contract, such as fulfilling a condition or task. For example, a common scenario is a reward contract, where one party promises to pay a reward for the return of lost property. In this case, the promise is enforceable only when the other party returns the property; until that action is taken, there is no obligation for them to act.

The concept of unilateral contracts emphasizes that the promise made by one party becomes enforceable when the other party performs the act, but it does not require both parties to make promises to each other. This structure contrasts with bilateral contracts, where mutual promises are exchanged and both parties have obligations. Thus, recognizing that only one party is bound by the terms solidifies the definition of a unilateral contract.