We are independent & ad-supported. We may earn a commission for purchases made through our links.

Advertiser Disclosure

Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.

How We Make Money

We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently from our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What is a Unilateral Contract?

By Charity Delich
Updated May 16, 2024
Our promise to you
MyLawQuestions is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At MyLawQuestions, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

A unilateral contract is a type of agreement in which one party promises a second party something if the second party will act – or refrain from acting – in a certain manner. The second party generally does not make an express promise and is not obligated to act in any way. For example, a unilateral contract would be created if a woman offered to pay a neighbor boy $15 US Dollars (USD) for mowing her lawn. In this example, the neighbor boy has not promised to mow the lawn, and he is not legally obligated to do so. The woman, however, would be required to pay the boy $15 USD if he does, in fact, mow her lawn.

In a unilateral contract, the party making a promise is typically referred to as the offeror or the promisor. The other party is usually called the offeree or the promisee. While the offeror expressly promises something to the offeree for completing – or for refraining from – a certain act, the offeree usually does not expressly consent to perform - or refrain from performing - the act. The offeree indicates his or her acceptance of the offer by actually performing the act. This phenomenon is known as acceptance by performance.

Once the offeree performs, then the offeror must complete his or her end of the bargain. If the offeree only partially performs, however, the offeror does not have a legal obligation to complete his or her promise. In other words, a unilateral contract becomes legally binding on an offeror once the offeree completely performs.

A unilateral contract is commonly formed in a number of cases. Insurance policies are usually unilateral agreements. In a standard insurance contract, the insurance company promises to provide coverage against losses while the insured does not make any promises. Rather, the insured simply pays a premium on the policy. The offering of a reward for providing information about a criminal suspect or for finding a lost cat or dog are other kinds of unilateral contracts.

A unilateral contract is different from a bilateral contract. In a bilateral contract, the parties each promise one another something. They may agree to do something or to refrain from doing something. Bilateral contracts are often formed in business arrangements. For example, a bilateral contract would be created if a company promises to pay a manufacturer for delivering 100 widgets and the manufacturer agrees to make the delivery. If the manufacturer did not make a return promise, the contract would be unilateral in nature.

MyLawQuestions is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.

Discussion Comments

By starrynight — On Aug 10, 2011

@indemnifyme - That's an interesting way to look at it. People definitely don't think twice about paying their insurance late, but if the insurance company doesn't fulfill the contract, they are in big trouble!

I actually think the whole idea of unilateral contract is pretty unfair. Why should one party be obligated while the other isn't? I think that if both people aren't under obligation it really shouldn't count as a contract at all!

By indemnifyme — On Aug 09, 2011

I think an insurance policy is the best example of a unilateral contract. Of course, this is probably because I work in insurance, and deal with unilateral contracts every single day!

As the article said, the insurance company is the only party that is really obligated to do anything. If the insured stops paying their premium, all we can do is cancel their policy. We can't go after them and make them keep paying if they don't want to!

In fact, now that I think about it, most people have more obligation to their gym than to their insurance company! Many people sign year long contracts with their gym, and the gym can force you to fulfill it. This seems a bit crazy to me, but whatever.

By MrMoody — On Aug 08, 2011

@David09 - I remember the Biblical story of David and Goliath.

Apparently King Saul made a unilateral contract of an offer to give his daughter to the man who killed Goliath. David famously rose to the challenge, as we all know, and ended up marrying Saul’s daughter.

I know that’s a funny analogy, but most of our laws have some Biblical precedence, so I wouldn’t be surprised if the unilateral contract went back to Bible days.

By David09 — On Aug 07, 2011

I offer a unilateral contract to my son now and then when I don’t want to mow my big backyard.

I tell him, “Mow the lawn and I’ll give you $20.” Nothing is signed, and he can choose to do it or not do it. It’s not part of his weekly chores (and he has those) so there is no obligation either way.

But boy, does money speak. I’ve never had him refuse yet.

By everetra — On Aug 07, 2011

@allenJo - That’s an excellent question. Frankly, I think that it would be up to the person making the offer to determine who gets the reward money.

After all, neither party can prove that they – and they alone – offered the tip that nailed the suspect. In my opinion, in your example I think the money would be given to the person with the precise location of the suspect.

If two people came forward with the precise location, then I guess it would be first come, first served, as they say.

By allenJo — On Aug 06, 2011

Wouldn’t a unilateral contract potentially open the first party open to acceptance of the contract by more than one other party? I don’t think that this would be the case with the lawnmower example that the article talks about; here two specific parties are involved.

However, what if someone offers up a $100,000 reward leading to the arrest of a suspect? Two people come forward, one with a tip as to the general location, the other with a tip as to the specific location.

Does the second person get the money because his information was more precise? Does the money get split between the two parties? How would that work?

MyLawQuestions, in your inbox

Our latest articles, guides, and more, delivered daily.

MyLawQuestions, in your inbox

Our latest articles, guides, and more, delivered daily.