In a unilateral contract, what is true?

In a unilateral contract, only one party is legally bound to perform. This type of contract is characterized by a promise made by one party in exchange for an act or performance by another party. For example, when a person offers a reward for the return of a lost item, the offeror is bound to pay the reward once the item is returned, but the other party is not obligated to take any action.

The essential feature of a unilateral contract is that the obligation to fulfill the terms is one-sided; the offeror is committed to performing as soon as the other party fulfills the required action or condition. This distinguishes unilateral contracts from bilateral contracts, where both parties have mutual obligations to perform.

While modification of a contract may be possible under certain circumstances, it generally depends on agreement by both parties in a bilateral contract rather than being an inherent feature of unilateral contracts. Additionally, unilateral contracts do not require written documentation to be valid; they can be formed based on the communicated promise and the action taken by the other party, making them valid even without formal written terms. Thus, the key point in a unilateral contract is the one-sided binding nature of the agreement.