Summary / Key Takeaways
- A unilateral contract is formed when one party promises something in exchange for a specific act by another.
- It becomes legally binding only when the requested action is completed.
- Common examples include reward offers and public service incentives.
- CobbleStone Contract Insight® helps manage unilateral agreements with automation and tracking tools.
What is a Unilateral Contract?
A unilateral contract is a legal agreement where only one party (the offeror) makes a promise, and the contract becomes binding only when the other party (the offeree) performs a specific action.
Example:
If someone offers a $500 reward for finding their lost dog, the contract is only valid once someone returns the dog.
How Does a Unilateral Contract Differ from a Bilateral Contract?
| Feature | Unilateral Contract | Bilateral Contract |
|---|---|---|
| Parties Involved | One promise, one action | Mutual promises |
| Formation | Upon performance | Upon exchange of promises |
| Example | Reward for lost item | Employment agreement |
Unilateral contracts are one-sided, while bilateral contracts involve mutual obligations.
What Are the Key Elements of a Unilateral Contract?
To be legally enforceable, a unilateral contract must include:
- Offer: A clear promise with specific terms.
- Acceptance by Performance: The offeree must complete the requested act.
- Consideration: The value exchanged (usually the act itself).
- Intent to Create Legal Relations: Both parties must intend to be legally bound.
Can a Unilateral Contract Be Revoked?
Yes—but only under certain conditions.
- Before performance begins: The offeror can revoke the offer.
What Are Real-World Examples of Unilateral Contracts?
- Reward Offers: $500 for returning a lost dog.
- Public Incentives: $1,500 for information leading to an arrest.
- Open Requests: Job postings or contests with promised rewards.
How Can You Manage Unilateral Contracts Effectively?
CobbleStone Contract Insight® offers tools to streamline unilateral agreement management:
- Centralized repository for open offers and requests.
- Automated alerts for performance deadlines.
- Workflow automation for tracking tasks and obligations.
- Budget and payment tracking for promised rewards.
Final Thoughts
Unilateral contracts are common in both personal and business contexts. Understanding their structure and enforceability is key to avoiding legal pitfalls. For organizations managing multiple unilateral agreements, contract management software like CobbleStone Contract Insight® can simplify oversight and ensure compliance.
In order to learn more about award-winning contract management software, book a free demo of CobbleStone Contract Insight® today!
This blog post was published on April 20th, 2023, and updated on October 27th, 2025.
*Legal Disclaimer: This article is not legal advice. The content of this article is for general informational and educational purposes only. The information on this website may not present the most up-to-date legal information. Specific guidelines on unilateral contracts are governed by state law. Readers should contact their attorneys for legal advice regarding any particular legal matter.
