Unilateral Contract: The Ultimate Guide to One-Sided Promises

LEGAL DISCLAIMER: This article provides general, informational content for educational purposes only. It is not a substitute for professional legal advice from a qualified attorney. Always consult with a lawyer for guidance on your specific legal situation.

Imagine you see a flyer tacked to a community bulletin board. It has a picture of a beloved, floppy-eared golden retriever named Gus. The text reads: “$500 Reward for the safe return of Gus. No questions asked. Call Jane at 555-1234.” You don't call Jane to tell her you're going to look. You don't sign anything. But you remember seeing a golden retriever that looked just like Gus yesterday near the park. You spend your afternoon searching, and sure enough, you find him. You bring the happy, tail-wagging dog back to Jane, and she joyfully hands you the $500. You just participated in a unilateral contract. Jane (the “offeror”) made a promise—to pay $500. But she wasn't asking for a promise in return. She was asking for an action: the return of her dog. The only way anyone on Earth could accept her offer and make it a binding contract was by actually performing that specific act. This “promise for an act” is the heart of a unilateral contract, a powerful but often misunderstood concept in American law.

• Key Takeaways At-a-Glance:
  • A Promise for an Act: A unilateral contract is a one-sided agreement where one party, the offeror, promises to pay or give a reward in exchange for the other party's performance of a specific act.
  • Acceptance is Action: Unlike a typical contract, you don't accept a unilateral contract by saying “I agree”; you accept it only by fully completing the requested act, such as finding the lost dog or providing specific information. acceptance.
  • Revocation is Risky: The offeror can generally revoke the offer at any time before the other party starts performing the act, creating a critical and sometimes unfair race against time. revocation.

The idea of a promise for an act is as old as commerce itself, but its formal place in common_law evolved significantly during the 19th century. As societies industrialized, mass communication and advertising became commonplace. Businesses began making promises not just to individuals, but to the public at large. This created a legal puzzle: how could you have a contract with someone you've never met, who never formally said “I accept”? The landmark English case of `carlill_v_carbolic_smoke_ball_co` in 1893 became the cornerstone. A company advertised a “smoke ball” that it claimed would prevent influenza, promising to pay £100 to anyone who used it as directed and still got sick. When Mrs. Carlill did just that and the company refused to pay, the court sided with her. It ruled that the advertisement was not “mere puffery” but a serious offer to the world—a unilateral contract. Anyone could accept it simply by buying the product and using it as instructed. This principle crossed the Atlantic and was woven into the fabric of American contract law. It became essential for validating reward offers, sales commissions, and certain types of public competitions. The law recognized that in these situations, demanding a formal, verbal acceptance before performance would be impractical and defeat the entire purpose of the offer.

Unlike criminal law, which is heavily defined by statutes passed by legislatures, contract law in the United States is primarily governed by state-level common law—a body of law built up over centuries through judicial decisions. There is no single federal “Unilateral Contract Act.” However, the most influential guide in this area is the Restatement (Second) of Contracts. While not a law itself, this treatise, published by the American Law Institute, is a highly respected summary of general common law principles that judges across the country look to for guidance. Two sections are particularly critical:

• Restatement (Second) of Contracts § 32: This section clarifies that when there is ambiguity, an offer should be interpreted as inviting acceptance by either a promise or performance, whichever the offeree chooses. This gives the person accepting the offer more flexibility.
• Restatement (Second) of Contracts § 45: This is the game-changer. It addresses the classic problem of revocation. Under old, harsh common law, an offeror could revoke the offer at any moment before the act was *fully* complete. Imagine someone promising you $1,000 to paint their house. Just as you were applying the final brushstroke, they could shout, “I revoke!” and owe you nothing. Section 45 created a fairer solution by stating that once an offeree begins or tenders performance, an `option_contract` is created. The offeror can no longer revoke the offer, though the offeree must still complete the performance to get the promised payment.

For contracts involving the sale of goods, the `uniform_commercial_code` (UCC) may also apply, though unilateral contracts more commonly involve services or actions.

Because contract law is state law, the specific rules, especially regarding revocation, can vary. Most states have adopted the modern, fairer approach championed by the Restatement § 45, but the nuances can differ.

A unilateral contract may seem simple, but legally, it's built on a few precise components. Understanding them is key to knowing your rights and obligations.

This is the starting point. The offeror (the person making the promise) must make an `offer` that is clear, definite, and explicit. It can't be a vague wish or a statement of future intention.

• Weak Offer: “I'm thinking about paying someone to mow my lawn this weekend.” This is not a unilateral contract offer. It's just a thought.
• Strong Offer: “I will pay $50 to the first person who mows my lawn at 123 Oak Street by 5 PM this Saturday.” This is a clear promise tied to a specific act, timeframe, and reward. It leaves no room for doubt about what is being requested and what will be given in return.

The offer can be made to a specific person, a group of people, or, as in the “lost dog” or *Carbolic Smoke Ball* cases, to the public at large.

This is the most unique feature of a unilateral contract. The offeree (the person who can accept the offer) does not accept by promising to do the act. They accept only by actually doing it. Imagine a race where the organizer shouts, “I'll give $100 to the first person who runs to the top of that hill!”

• Not Acceptance: Shouting back, “I accept! I'll run up that hill!” This does not form a contract.
• Acceptance: Being the first person to physically reach the top of the hill. The act of running and reaching the summit *is* the acceptance.

This means that until the act is complete, no binding contract exists (though, as we'll see, the offeror's right to revoke may be limited).

Revocation is the act of the offeror withdrawing the offer. This is the most dangerous area for the offeree.

• The Old Rule (Harsh): Under traditional common law, the offeror could revoke the offer at any time before the act was 100% complete. In our hill-running example, the organizer could wait until a runner was one step from the summit and yell “I revoke the offer!” and owe them nothing. This was seen as fundamentally unfair.
• The Modern Rule (Fairer): To fix this injustice, modern American law, guided by Restatement § 45, treats the beginning of performance as the creation of an option contract. This means once the offeree takes a substantial step toward completing the act (e.g., starts running the race, buys the paint for the house), the offeror cannot revoke the offer for a reasonable period of time. The offeror is now bound to their promise, contingent on the offeree actually finishing the job.

The offeror, however, is still free to revoke the offer at any time before performance begins. If they post a reward for a lost cat and then find the cat themselves, they can take down the posters and the offer is revoked. Anyone who starts searching *after* the offer has been reasonably revoked has no claim.

If you find yourself in a situation that looks like a unilateral contract, whether you are the one making the offer or the one performing the act, a clear, step-by-step approach is crucial.

Before you act, carefully examine the promise being made.

• Is it clear and definite? Does it specify the exact act required, the reward offered, and any conditions (e.g., “by Friday,” “to the first person”)? Vague promises are difficult to enforce.
• Is it an offer or just an advertisement? Most ads are considered “invitations to make an offer,” not offers themselves. A store advertising TVs for $500 is not making a unilateral contract to sell to everyone who shows up; they are inviting you to come in and offer to buy one. A reward offer, however, is typically treated as a true offer.
• To whom is it made? Is it made to you specifically, or to the public?

If you decide to perform the act, documentation is your best friend.

• Preserve the Offer: Take a picture of the reward poster. Save the email with the commission bonus structure. Print the webpage with the contest rules. This is your proof of the promise.
• Document Your Performance: Keep a log of your time and expenses. Take date-stamped photos of your progress (e.g., painting the fence). Get receipts for any materials you had to buy. If you are returning a lost item, consider doing it with a witness present.

Every state has a `statute_of_limitations` for contract disputes, which is a deadline for filing a lawsuit. If the offeror refuses to pay after you've performed, you only have a certain number of years to sue. This can range from 3 to 10 years depending on the state and whether the contract was considered written or oral. Do not wait.

Once you have fully performed the act, notify the offeror promptly. While the performance itself is the acceptance, providing clear notice prevents any argument that they didn't know the act was completed. A simple, documented communication (like an email) stating, “I have completed the task you requested in your offer of [Date] and am now requesting payment as promised,” can be very powerful.

If the offeror refuses to pay, you have a `breach_of_contract` claim.

• Send a Demand Letter: Your first step is often a formal letter, known as a `demand_letter`, sent via certified mail. It should clearly state the original offer, describe your full performance, and demand the promised payment by a specific date.
• Consider Small Claims Court: For smaller amounts (typically under $5,000 to $10,000, depending on the state), `small_claims_court` is an inexpensive and accessible way to have a judge hear your case without needing to hire a lawyer.
• Consult an Attorney: For larger or more complex cases, consulting with a contract lawyer is essential.

Unlike bilateral contracts, which often start with a signed agreement, unilateral contracts are documented through performance. The most critical “paperwork” includes:

• The Written Offer: This is the foundational document. It could be a physical flyer, a formal company memo about a bonus plan, or a detailed email. This document proves the terms of the promise.
• Proof of Performance: This isn't a pre-made form but a collection of evidence you create. It can include photographs, videos, receipts for materials, GPS data, or sworn statements from witnesses (`affidavit`). This evidence proves you fulfilled your end of the bargain.
• A Formal Demand Letter: If payment is not made, this is often the first formal legal document you will create. You can find many templates online, but it should contain: your name and address, the offeror's name and address, a summary of the unilateral contract offer, a description of your completed performance, the amount owed, and a deadline for payment before you pursue legal action.

The principles of unilateral contracts weren't invented in a vacuum; they were forged in real-life court battles. These cases are still taught in law schools today because they provide powerful, enduring lessons.

• The Backstory: The Carbolic Smoke Ball Company ran ads promising a £100 reward to anyone who used their product three times daily for two weeks and still contracted influenza. To show their seriousness, they stated they had deposited £1,000 in a bank. Louisa Carlill used the smoke ball as directed, got the flu, and sued for the £100.
• The Legal Question: Was a public advertisement a serious offer that could be accepted by anyone who performed the conditions, without notifying the company first?
• The Court's Holding: The court ruled yes. The ad was a clear promise, not “mere puff.” The company's deposit of £1,000 showed they intended to be bound. The court held that in a unilateral contract, performance of the condition *is* the acceptance, and there is no need to notify the offeror of one's intent to perform.
• Impact on You Today: This case is the reason why reward offers and many public competitions are legally binding. It establishes that a promise made to the world at large is just as enforceable as one made in a private room, as long as someone meets the conditions.

• The Backstory: A creditor (Pattberg) promised his debtor (Petterson) that if he paid off his mortgage early, he would forgive $780 of the debt. Petterson secured the money and went to Pattberg's house to pay. He knocked on the door and announced he was there to pay off the mortgage. Before Petterson could hand over the money, Pattberg said, “I have sold the mortgage. I revoke my offer.”
• The Legal Question: Could the offer be revoked when the offeree was literally standing on the doorstep, ready and able to perform, but had not yet handed over the money?
• The Court's Holding: In a decision now seen as archaic and harsh, the New York Court of Appeals said yes. The court stuck to the rigid, traditional rule: the act (payment) was not *fully* complete. The tender of payment was not the payment itself. Therefore, Pattberg could revoke in that split second before the cash changed hands.
• Impact on You Today: This case is a perfect illustration of the problem the Restatement (Second) of Contracts § 45 was designed to solve. Today, under the modern rule, a court would likely find that Petterson had begun performance by securing the funds and showing up to pay, making Pattberg's offer irrevocable. The case serves as a stark reminder of the legal protections modern contract law now provides.

• The Backstory: A real estate agency announced a bonus program: agents earning over $15,000 in commissions would get a bonus at the end of the year. An agent named Cook surpassed that threshold by September. In October, the company announced that agents would have to remain with the company until the following March to receive the bonus. Cook left in January and sued for her bonus.
• The Legal Question: Could the employer change the rules of the bonus offer after the employee had already completed the primary condition (earning the commission)?
• The Court's Holding: The Missouri Court of Appeals ruled in favor of Cook. It held that the bonus plan was a unilateral contract offer. Cook accepted the offer by performing the act of earning over $15,000 in commissions. Once she had substantially performed that act, the company's offer became irrevocable and they could not add new conditions to it.
• Impact on You Today: This case is critically important for employees. It means that when your employer offers a bonus for achieving a specific goal (e.g., “sell 100 units by December 31st for a $5,000 bonus”), they generally cannot revoke that offer or change the rules once you have substantially completed the task.

The principles of unilateral contracts are more relevant than ever in the digital age.

• The Gig Economy: Companies like Uber, DoorDash, and Instacart frequently use bonus structures that are classic unilateral contract offers. “Complete 50 deliveries this weekend and earn an extra $100.” Drivers don't promise to do it; they accept by doing it. Controversies arise when these companies change the terms of the offer mid-stream or use algorithms to make it difficult for workers to complete the task, raising complex legal questions about when performance has “begun” and when an offer can be fairly revoked.
• Bug Bounties: Tech companies offer standing rewards (sometimes hundreds of thousands of dollars) to ethical hackers who discover and report security vulnerabilities in their software. This is a unilateral contract with the global tech community. Acceptance is the successful (and responsible) reporting of a qualifying bug.
• Online Contests and Promotions: Sweepstakes, “first 100 customers get a free gift” offers, and user-generated content contests are all structured as unilateral contracts. The legal battles often center on whether the terms were clear and whether the company can change the rules after people have already invested time and effort.

The future of unilateral contracts may lie in code. The rise of `blockchain` technology and `smart_contracts` presents a fascinating evolution. A smart contract is a self-executing contract with the terms of the agreement directly written into lines of code. Imagine a unilateral smart contract for a freelance graphic designer. A company could code a contract on the Ethereum blockchain that says: “We will automatically release 1 ETH (cryptocurrency) to the first designer who submits a logo that meets these five technical criteria and receives a majority vote from our token holders.” The offer is public. The acceptance is the submission of the qualifying logo. The payment is not reliant on the company's willingness to pay; it is automatically executed by the code once the conditions are met. This removes the risk of non-payment and creates a perfectly binding, trustless unilateral contract for the digital age.

• acceptance: An offeree's agreement to the terms of an offer, creating a contract. In a unilateral contract, this is done through performance.
• bilateral_contract: A contract based on an exchange of promises (e.g., “I promise to paint your house next week, and you promise to pay me $1,000”).
• breach_of_contract: A failure to perform any promise that forms all or part of a contract without a legal excuse.
• common_law: The body of law derived from judicial decisions of courts rather than from statutes.
• consideration: Something of value (an act, a forbearance, or a return promise) bargained for and given in exchange for a promise.
• contract: A legally enforceable agreement between two or more parties that creates an obligation to do or not do particular things.
• demand_letter: A formal letter sent by one party to another demanding payment or performance of an obligation.
• offer: A clear promise by one party to do or refrain from doing something in exchange for something from another party.
• offeree: The party to whom an offer is made.
• offeror: The party who makes an offer.
• option_contract: A contract that keeps an offer open for a specified period, preventing the offeror from revoking it during that time.
• partial_performance: The beginning of performance of the act requested in a unilateral contract offer, which often makes the offer irrevocable.
• promissory_estoppel: A legal principle that may be used to enforce a promise without a formal contract if one party relied on that promise to their detriment.
• revocation: The withdrawal of an offer by the offeror.
• uniform_commercial_code: A set of laws governing commercial transactions in the United States, particularly the sale of goods.

• bilateral_contract
• contract_law
• offer_and_acceptance
• breach_of_contract
• consideration
• option_contract
• promissory_estoppel