Unilateral contract
A contract that binds only one party to future performance
A unilateral contract is a type of contract that involves an offer made by one party that can be accepted only through a specific action or performance by the other party. It is also known as a one-sided contract because one party makes a promise (offer) while the other party performs an act (acceptance).
In a unilateral contract, one party is binding themselves to act while the other party is free to act or not to act. A good example is a reward contract, where the offeror promises a reward for a specific act to be performed by the offeree. If the offeree performs the act, they will receive the reward. However, if the offeree does not perform the act, no contract exists.
Another example of a unilateral contract is an insurance contract. In this case, the insurer makes an offer to provide coverage in exchange for periodic premium payments from the insured. The contract comes into existence once the insurer makes the offer, and the insured agrees to pay the premiums. If the insured does not pay the premiums, the contract will be terminated.
In conclusion, a unilateral contract is a type of contract that is accepted through the performance of an act by one party. It is a one-sided contract, in which one party is obligated to perform once the other party accepts the offer by performing a specific act.
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