What does the term unilateral contract mean?

• A. A unilateral contract is a one-sided contract. This means only one party makes an enforceable promise
• B. A contract in which both parties promise to perform
• C. A contract formed by offer and counteroffer
• D. A contract that is always bilateral

Answer: (A)

Unilateral contracts are created when one party makes a promise in exchange for the other party’s performance. The obligation lies with the promisor only after the other person chooses to perform; acceptance is by completing the requested act, not by promising to do it.

A common example is a reward offer: the owner promises to pay a reward if someone finds and returns a lost item. The finder isn’t obligated to look for the item, but if they do find and return it, the owner must pay. Until performance occurs, there’s no contract; once performance happens, the contract is formed and the promisor is bound to pay.

This fits the idea of a one-sided contract, unlike bilateral contracts where both sides promise to perform.