If you need examples of unilateral contracts, you should know that a unilateral contract is one in which the buyer intends to pay for a specified performance or legal act. When it comes to a unilateral agreement, only one party pays the other for a specific duty. If that party completes the duty, the other party needs to pay accordingly.

How Does a Unilateral Contract Work?

With a unilateral contract, the first party is not under any obligation to pay, and the second party only needs to fulfill the duty if they wish to. For instance, Jim offers a unilateral contract to pay Shelley $3,000 if she puts Jim's boat into storage. Shelley has no legal obligation to store the boat, but if she chooses to, Jim has to pay her the $3,000.

Unilateral contracts are also enforceable in court, even though legal situations cannot arise until a party claims to finish a certain task.

Because a unilateral contract has no validity until one party completes a task, legal contestation usually takes the form of the giving party not paying the agreed sum. A contract breach would then be based on the clarity of the agreement, and whether one party can prove that the task was completed.

In addition, unilateral contracts can offer rewards other than money, but cash is a primary incentive. For instance, Jerry places an advertisement offering to pay $500 for the return of his missing dog. In this instance, any person may enter into a unilateral agreement by returning the dog. This is one of the few cases where an advertisement is considered a contract within itself.

Also, an insurance company can agree to pay an insured person money if certain events occur. This is a unilateral agreement, and the insurance company will not have to pay if the events never happen.

Note that not all promises can create a unilateral agreement.

Unilateral Agreement Stipulations

The promise itself must be an express promise. The contract must clearly offer something valuable in exchange for the other party performing a service. Since the promise must offer something of value in return for an omission or act, that person who made the promise in a unilateral agreement is known as the offeror.

The opposite party who may accept is called the offeree, and the offeree has no duty to act in any way. Therefore, the offeree has the power to accept or reject the offer. If the offeree chooses to accept and honor the unilateral agreement, the contract is formed and legally viable.

Unilateral Complications

Complications can arise when it comes to unilateral contracts, especially in areas pertaining to:

  • Acceptance
  • Consideration
  • Offer

If you have a legal issue that involves a unilateral agreement, you should contact a lawyer to find out what options you have.

Bilateral Agreement

A bilateral contract is an agreement between at least two groups of people, and most people or businesses would fit into this category. In fact, you enter into bilateral agreements when you do the following:

  • Purchase a product at a store.
  • Order meals at restaurants.
  • Get treated by a doctor.

In each of these types of situations, a promise is made by you to perform an action involving another person in response to that person's action.

The difference between a bilateral contract and a unilateral contract in the above types of situations is with a unilateral contract, the person responsible for fulfilling the request is not obligated to do so.

Broken Agreement

Regardless of the contract form, a contract breach occurs when parties fail to honor the agreement.

For instance, if you offer $200 to someone who returns your dog and refuse to pay because you believe the offeree stole your pet from you, you're still in violation of the contract because you failed to pay that individual.

In a workplace setting, a bilateral agreement may be severed if:

  • A coworker does not complete a task.
  • An employee does something that's restricted under his or her contract.
  • A customer stops the contractor from completing the task at hand.

Bilateral Contract Example

In the example of Ted's dog, the contract would be bilateral if Sara enters into an exclusive contract with him to search for the dog, as each party would then be under an obligation. The main distinction between bilateral and unilateral agreements is that a bilateral agreement creates a reciprocal obligation. Sara is now obligated to look for the dog and could be in violation of the contract for failing to do so. Ted is also under an obligation, as he would pay Jill $200 for the dog's return, and he cannot offer the same agreement to outside parties.

Enforcing Bilateral or Unilateral Contracts in Court

Both bilateral and unilateral contracts are legally enforceable. Bilateral contracts are enforceable from inception, as both parties have promised to fulfill the contract. Unilateral contracts are enforceable only when a person begins fulfilling the contract, which can be at any time. In the event there is a breach of contract, you will be required to produce proof and/or establish the following:

  • There was an actual contract in place.
  • The contract was breached/broken.
  • Because of the broken contract, you suffered a loss.
  • The person you're filing suit against is the person responsible for upholding the contract.

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