A unilateral contract is a contract created by an offer that can only be accepted by performance.
In a unilateral contract, there is an express offer that payment is made only by a party’s performance. Common examples include reward offers or contests, where one party promises to pay or give a reward if the other party accomplishes a specific task. The offeror may revoke the offer before the offeree’s performance begins, typically requiring express revocation. Similar to contract law in general, specific guidelines on unilateral contracts are governed by state laws, rather than federal laws.
[Last updated in July of 2024 by the Wex Definitions Team]