What characterizes a unilateral contract?

A unilateral contract is defined by the scenario where one party makes a promise that the other party can choose to accept. In this situation, only one party is obligated to perform their part of the agreement, while the other party is not required to act unless they decide to accept the terms of the promise. This characteristic makes unilateral contracts distinct because the initiating party does not seek a reciprocal obligation from the other party at the time of the promise.

This concept arises frequently in real estate, where a seller might offer a reward for a specific act, such as finding a buyer for their property. Here, the seller's promise to pay is contingent upon the buyer completing the act. The acceptance is initiated by the action of the other party, but that action is not mandated; it is entirely up to their discretion.

The other options do not accurately characterize unilateral contracts. In a bilateral contract, both parties are required to fulfill their promises, contrasting the nature of unilateral agreements. The sale of real estate can occur in either type of contract, but it does not specifically define a unilateral contract. Additionally, saying it is a legally binding agreement with no obligations is misleading, as unilateral contracts do create legal obligations for the party making the promise when the promise is accepted.