In a unilateral contract, what does one party do?

• A. Promises something in return for an act by another party
• B. Both parties sign and seal a document
• C. Promises to do nothing
• D. Joins in a mutual agreement

Answer: (A)

In a unilateral contract, one party makes a promise in exchange for an act performed by the other party. This means that one side is committed to fulfilling their promise only if the other side completes the specified action. For example, a classic instance of a unilateral contract is a reward offer; if someone promises to pay a sum of money for the return of a lost pet, they are only obligated to pay once the pet is returned.

The fundamental characteristic of this type of contract is that only one party is making a promise, whereas the other is expected to perform an act to trigger that promise. This distinguishes it from bilateral contracts, where both parties exchange promises. The unilateral nature means there is no need for both parties to sign a document or create a mutual agreement beforehand, and it doesn’t involve simply promising to do nothing or formulating a formalized agreement as in other types of contracts.