UNILATERAL CONTRACT AGREEMENT

unlike the more common bilateral contract — is a type of agreement where one party (sometimes called the offeror) makes an offer to a person, organization, or the general public. In order for the offeree to receive whatever the offeror promises, they need to perform the act or service that was requested in the agreement.

A bilateral contract contains set agreements and promises between two parties whereas, in a unilateral contract, there are no promises between parties. Instead, the offeror requires that the offeree perform an act, meet a request, or provide a service.

Examples of unilateral contracts.

There are many different situations which may call for a unilateral contract.

A common example could be a contract for a certain type of labor, such as sales. Salespeople may be eligible for rewards or bonuses if they reach a certain degree of success — generally shown by their conversion rate. Their contract for employment outlines this, promising a certain amount of payment or benefit once that threshold has been reached.

You might also see this in your hotel stay agreements for your next trip. As a guest, you won’t be charged any sort of fee if you leave the room in a presentable condition. However, if anything breaks, you may be charged a courtesy fee as outlined in your contract.

What you should know about unilateral contracts.

  • Unilateral contracts are just as binding as bilateral contracts, but only one party is making a promise.
  • The only way to accept a unilateral contract is through the completion of a task.
  • An offeree has no obligation to perform the act in the unilateral agreement.
  • To have a legally binding unilateral contract, you must have mutual agreement and intention. You also must have certainty, which happens when everyone understands the contract terms.
  • The element of legal consideration in the context of a unilateral contract defines whatever form of payment you both have agreed to using.

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