In unilateral contracts, the offeror extends a promise contingent upon the offeree completing a specified action. This creates a situation where only one party, the offeror, is legally bound. For instance, a reward poster for a lost pet establishes a unilateral contract. The offeror promises a reward, but only becomes obligated to pay if someone finds and returns the pet. The finder is not obligated to search, but if they perform the requested action, the offeror must fulfill their promise.
This distinction is vital for understanding the nature of obligations in various common agreements, including reward offers, insurance policies, and certain sales promotions. It clarifies which party bears the legal burden of performance and provides a framework for resolving disputes. Historically, this principle has been essential in establishing clear parameters for commercial and personal transactions, facilitating trust and reducing ambiguity in agreements.
