What defines a unilateral contract?

A unilateral contract is specifically defined as an agreement in which one party makes a promise in exchange for an act or performance from another party. In this type of contract, only one party is bound to fulfill an obligation, while the other party is not required to take any action to complete the agreement. This contract becomes enforceable when the second party performs the requested act.

For example, a common scenario involves a reward offer for the return of lost property. The person offering the reward (the promisor) is legally bound to pay the reward once the other party (the promisee) finds and returns the lost item. The key here is that the promise is only made by one party based on the expectation that the other party will act, which is why this choice is the defining characteristic of a unilateral contract. In contrast, the other options involve concepts related to bilateral contracts or the status of contract performance.