Unilateral Contract

Legal agreement in which only one of the two parties makes legally enforceable promises. An insurance contract is a unilateral contract because only the insurer has made a promise of future performance and only the insurer can be charged with breach of contract. In contrast, in a bilateral contract, both parties promise future performance.

An obligation given by one party contingent on the performance of another party, but without obligating the second party to perform. Compare with Bilateral Contract.
Example: A Broker makes a unilateral contract with her associates. She offers a trip to Hawaii to any salesperson who sells $1 million of property during the month. None of the salespeople is obligated to meet the goal, but the broker is obligated to provide the trip should any salesperson perform the feat.

A contract in which only one party makes an express promise, or undertakes a performance without first securing a reciprocal agreement from the other party.

In a unilateral, or one-sided, contract, one party, known as the offeror, makes a promise in exchange for an act (or abstention from acting) by another party, known as the offeree. If the offeree acts on the offeror's promise, the offeror is legally obligated to fulfill the contract, but an offeree cannot be forced to act (or not act), because no return promise has been made to the offeror. After an offeree has performed, only one enforceable promise exists, that of the offeror.

A unilateral contract differs from a bilateral contract, in which the parties exchange mutual promises. Bilateral contracts are commonly used in business transactions; a sale of goods is a type of bilateral contract.

Reward offers are usually unilateral contracts. The offeror (the party offering the reward) cannot impel anyone to fulfill the reward offer. An offeree can sue for breach of contract, however, if the offeror does not provide the reward after the offeree has fulfilled the contract's requirements.