Unilateral Contract Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Unilateral Contract, written in plain English, along with examples of how it is used.
What is Unilateral Contract?
(n) A unilateral contract is an offer or promise by the person giving the offer or promise without a second party accepting it. The offeror is bound to abide by the promise even though there is no reciprocal acceptance. So in this contract only one person is responsible to full fill the conditions set in that contract. Unilateral contacts are made when there is no defined second party or it is offered to many at a time. For example offer to pay to the founder of goods.
History and Meaning of Unilateral Contract
Unilateral contracts have a long history in contract law. The term "unilateral" means "one-sided," and a unilateral contract is one in which only one party makes a promise or offer. The other party does not have to accept the offer, but if they do, they become bound by the terms of the contract. This type of contract is used when the offeror wants to make an offer to the public at large, without specifying who the offeree will be.
Examples of Unilateral Contract
A reward offer for the return of a lost item is a unilateral contract. The offeror promises to pay the reward to anyone who finds and returns the item, and the finder does not have to communicate their acceptance of the offer.
An advertisement for a sale is a unilateral contract. The advertiser promises to sell the goods at a certain price, and anyone who shows up at the sale and pays the price is bound by the terms of the contract.
A performance-based contract is a type of unilateral contract. For example, a company might promise to pay a bonus to an employee who achieves a certain sales target. The employee does not have to accept the offer, but if they do and meet the target, they become entitled to the bonus.
Legal Terms Similar to Unilateral Contract
Bilateral contract - a contract in which both parties make promises to each other.
Offer and acceptance - the basic elements of a contract, in which one party makes an offer and the other party accepts it.
Consideration - something of value that is exchanged between the parties to a contract, and is necessary for the contract to be binding.