As a professional, I have come across various legal terminologies, one of which is a “unilateral contract.” A unilateral contract is a legal agreement where only one party makes a promise or undertakes an obligation. The other party is not required to perform any action or provide any consideration for the agreement to be valid. The best examples of such contracts are reward offers and insurance contracts.
In a reward offer, the promisor undertakes to pay a certain amount of money or provide some kind of compensation to anyone who performs a specific act. For example, if a person promises to pay a reward for the return of a lost item, then the contract is a unilateral one. The finder of the item is not required to return it, but if they do, they can claim the reward.
Similarly, insurance contracts are also unilateral. The insurance provider undertakes to pay compensation to the insured in the event of an occurrence of a specific risk. The insured is not required to pay any consideration for the agreement to be valid. If the event occurs, the insurance company is obligated to pay the compensation.
In a unilateral contract, the offeror is bound by their promise or obligation, whereas the offeree is not obligated to perform any action. However, if the offeree chooses to perform the action, they can claim the reward or compensation promised.
In conclusion, a unilateral contract is a legal agreement where only one party undertakes an obligation or makes a promise. The other party is not required to provide any consideration for the contract to be valid. Reward offers and insurance contracts are some of the best examples of unilateral contracts.