unilateral contract
A unilateral contract is a contract formed when an offer can be accepted only through performance. Unlike a bilateral contract, which involves mutual promises, a unilateral contract arises when one party promises something in return for the other party’s act.
In a unilateral contract, the offeror specifies that payment or performance is due only if the act is completed. A common example is a reward offer: a promise to pay $100 to whoever finds and returns a lost dog becomes binding only if the dog is returned. Similarly, contests often operate as unilateral contracts, where one party promises a prize if another completes a defined task.
The offeror may revoke the offer any time before the offeree begins performance. Once performance has begun, however, many courts hold that the offeror must give the offeree a reasonable opportunity to complete it. Rules governing unilateral contracts vary by jurisdiction, since contract law is primarily a matter of state law.
Illustrative case law: Petterson v. Pattberg, 248 N.Y. 86, 161 N.E. 428 (1928)
[Last reviewed in September of 2025 by the Wex Definitions Team]
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