A unilateral contract is a type of agreement in which one party makes a promise in exchange for the performance of an act by another party. This means that only one party is legally obligated to fulfill their promise, while the other party's obligation arises only when they complete the specified act. This type of contract often relates to scenarios where acceptance occurs through action rather than mutual agreement, influencing concepts like anticipatory repudiation and various sources of contract law.
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In a unilateral contract, the offeror's promise is contingent upon the performance of the act by the offeree.
Common examples of unilateral contracts include rewards for lost items or contests, where payment or benefit is only made once the act is completed.
Once the offeree begins to perform the act specified in the unilateral contract, they cannot withdraw their performance without liability.
Unilateral contracts do not require acceptance in a traditional sense; instead, performance serves as acceptance.
If an offeror indicates that the performance must be completed within a specific timeframe, anticipatory repudiation can occur if the offeree indicates they will not perform.
Review Questions
How does a unilateral contract differ from a bilateral contract in terms of obligations and acceptance?
A unilateral contract is characterized by one party making a promise that is fulfilled only when another party performs a specified act, creating an obligation solely on the offeror until that act is completed. In contrast, a bilateral contract involves mutual obligations where both parties promise to perform certain duties, thus both are legally bound from the moment of agreement. The distinction affects how acceptance occurs; in unilateral contracts, it happens through performance rather than mutual promises.
Discuss how anticipatory repudiation applies to unilateral contracts and what implications it has for the parties involved.
Anticipatory repudiation in unilateral contracts occurs when one party clearly indicates they will not fulfill their part of the agreement before the performance is completed. This creates uncertainty for the offeror since they have promised something contingent on performance. The offeror may choose to treat this as a breach and seek remedies even if the act has not yet been performed, impacting how contractual relations are viewed and managed.
Evaluate the role of acceptance in unilateral contracts and its impact on enforceability compared to traditional bilateral agreements.
In unilateral contracts, acceptance is uniquely tied to action; it only becomes enforceable once the offeree performs the act requested in exchange for the promise. This stands in contrast to bilateral contracts, where acceptance occurs at the point of agreement between parties. The nature of acceptance in unilateral contracts makes them flexible but can complicate enforceability since it hinges on actions rather than mutual commitments, leading to potential disputes about whether an obligation exists until performance is underway.