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| Image: Moneybestpal.com |
A unilateral contract is a sort of agreement in which one party promises something to another in return for a certain action or performance. In contrast to a bilateral contract, when both parties pledge to each other in turn, a unilateral contract simply entails one promise and one act. An incentive offer, for instance, is a unilateral contract.
Anyone who finds and returns the missing item will receive payment from the individual offering the prize, who also guarantees a specific sum. No guarantee is made by the person who accepts the offer; they merely locate and give back the object. After the offeree begins the act, the offeror cannot change the offer; nevertheless, the offeree is free to quit performing at any moment without incurring any penalties.
When the offeror is unsure about the offeree or the number of people who will perform the act, unilateral agreements are frequently used. A firm might, for instance, award a prize to the person who comes up with the best slogan for its brand. Both the participants in the contest and the number of entries they will receive are unknown to the company. Participants are under no obligation to submit their slogans; the corporation is only required to pay the reward to the winner. On the other hand, once someone submits their slogan, they have finished their performance and the business cannot revoke the offer.
Moreover, unilateral agreements can be used to persuade parties to carry out their legal obligations. For instance, if a debtor pays a specific sum by a particular date, a creditor can promise to lower the debt. The debtor is not required to accept the offer, but should they do so, the creditor is then obligated to keep their promise because the debtor has fulfilled their obligation. The initial debt, however, is still owed if the debtor doesn't pay by the due date.
As long as they satisfy the fundamental criteria of a legal contract—offer, acceptance, consideration, capacity, and legality—unilateral agreements are enforceable in court. The offer must be communicated to the offeree and must be clear and firm. The act required by the offeror must be completed in order to accept. The exchange of anything of value for a promise or performance by one party from the other is considered the consideration. A contract can only be entered into if both parties are able to do so legally and mentally. Finally, the agreement must not contravene any legal or ethical standards.
