Which term describes a contract where one party is obligated only if the other party accepts?

A unilateral contract is a type of agreement where one party makes a promise or takes action contingent upon the performance or acceptance of the other party. In this structure, the first party is solely responsible for fulfilling their obligation only when the other party fulfills their part of the agreement, typically by performing a specific act.

For instance, in a unilateral contract, a person might offer a reward for the return of a lost pet. The person offering the reward is bound to pay only once someone finds and returns the pet; the finder is not obligated to return the pet to receive the reward. This concept highlights that the obligation is one-sided until the action is taken.

In contrast, a bilateral contract involves mutual obligations where both parties agree to perform certain duties. An implied contract arises from the actions or circumstances rather than being explicitly stated, while an express contract is one where the terms are clearly articulated. These definitions clarify how a unilateral contract is uniquely defined by the one-sided obligation contingent on acceptance or action by another party.