Which of the following is true about unilateral contracts?

Unilateral contracts are defined by the fact that only one party makes a promise that is contingent upon the performance of an act by the other party. In this type of contract, one party offers something of value (usually a promise) in exchange for a specific action (performance) from another party. The classic example of a unilateral contract is a reward offer, such as when someone promises to pay a reward for the return of a lost pet. The promise is only valid if the action of returning the pet is carried out.

The essence of a unilateral contract lies in its structure—one party's obligation is fulfilled only when the other party performs the action. This distinguishes it from bilateral contracts, which involve mutual promises between both parties.

Understanding this concept helps clarify how unilateral contracts operate, emphasizing that enforcement does not require reciprocal promises, which is a key characteristic defining such agreements.