What is meant by "unilateral contracts"?

A unilateral contract is defined as a type of contract where one party makes a promise in exchange for a specific action from another party. In this arrangement, only one party is legally bound to fulfill their promise, while the other party is not obligated until they complete the specified action. For instance, if someone offers a reward for finding their lost pet, the offeror is making a promise to pay the reward, but the finder is only bound to the contract once they perform the act of locating and returning the pet.

The nature of unilateral contracts means that they often have clear parameters, making it easy to identify when the conditions have been met. This characteristic sets them apart from bilateral contracts, where both parties exchange promises and are obligated to fulfill their commitments simultaneously. Understanding this distinction is crucial for recognizing how various contract types operate within legal frameworks.