What is a Unilateral Contract? (with great examples)

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Philip Reynolds
byPhilip Reynolds
December 28, 2023

When most of us think of contracts, we think about what we would call a bilateral contract. A bilateral contract is an agreement between two parties.

Unilateral contracts are agreements where one individual or organisation (party)

  • makes a promise or offer
  • in exchange for something performed by someone else

The key part being that the individual creating the contract can create an offer without knowing who the other party might be at the time of offer.

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In most contracts we sign, like an employment contract, two parties enter in to an agreement. The employer produces an employment contract, the employee signs, the employer counter-signs and now we have a bilateral agreement.

However, consider the case of a Finders Fee that a business owner may promise to anyone introducing a new client. In this case, the Business Owner is not entering in to a contract with a specified individual. However, they are still bound by the terms of the agreement should someone introduce new business to them.

This is a unilateral contract.

Great Real World Examples of Unilateral Contracts

  • Business Finders Fees
  • Competitions and Contests – Any contest promising a prize to the winner is a great example of a unilateral contract
  • Mail-in Rebates
  • Whistleblower Rewards – Corporations and governments can offer monetary rewards to anyone coming forward with information on illegal activities
  • Lost Item Rewards – rewards for finding lost or stolen items
  • Customer Loyalty – Businesses offering in-kind services to customers who hit certain reward targets
  • Academic Scholarships – Offered to students who achieve certain grades or marks in entrance exams