libterm.com A unilateral contract involves a promise made by one party in exchange for the performance of an act by another party, creating obligations only when the act is completed. This type of contract is commonly used in reward offers, where the offeror is bound to pay once the offeree performs the requested task. Discover how unilateral contracts work and what they mean for your legal agreements by reading the full article.
Table of Comparison
| Aspect | Unilateral Contract | Implied Contract |
|---|---|---|
| Definition | A contract where one party makes a promise in exchange for an act. | A contract formed by the parties' behavior or circumstances, not explicit words. |
| Formation | Promise + performance of requested act. | Conduct or facts indicating agreement. |
| Example | Reward offer for finding a lost dog. | Ordering food in a restaurant implies payment agreement. |
| Obligation | Only offeror is bound until act is completed. | Both parties have mutual obligations. |
| Acceptance | By performing the requested act. | Inferred from actions or circumstances. |
| Legal Enforceability | Enforceable upon completion of act. | Enforceable based on implied terms from conduct. |
Definition of Unilateral Contract
A unilateral contract is a legally binding agreement where only one party makes a promise in exchange for the other party performing a specific act. Unlike bilateral contracts, which involve mutual promises, a unilateral contract becomes enforceable only when the requested performance is completed. Examples include reward offers and insurance policies, where the offeror's obligation arises solely upon fulfillment of the contract terms by the offeree.
Definition of Implied Contract
An implied contract arises from the conduct, actions, or circumstances of the parties rather than explicit written or spoken words, establishing mutual obligations inferred by law. Unlike a unilateral contract, where one party makes a clear promise in exchange for an act, an implied contract assumes agreement through behavior indicating acceptance and intent. Courts recognize implied contracts to enforce fairness when no formal agreement exists but an understanding is evident between parties.
Key Characteristics of Unilateral Contracts
Unilateral contracts are agreements where only one party makes a promise, which is enforceable upon the other party's completion of a specified act, such as a reward offer for finding a lost item. Key characteristics include the promise being contingent on performance, the offeror's obligation arising only after the offeree completes the requested act, and no mutual exchange of promises occurring upfront. Unlike implied contracts, unilateral contracts explicitly require action rather than inferred conduct or circumstances to establish agreement terms.
Key Characteristics of Implied Contracts
Implied contracts are agreements formed by the actions, conduct, or circumstances of the parties rather than explicit words, creating legally binding obligations based on mutual understanding. Key characteristics include the inference of terms from behavior, the necessity of a reasonable assumption that an agreement exists, and the parties' intent to contract demonstrated through performance or acceptance of benefits. Unlike unilateral contracts, which require a specific act to accept an offer, implied contracts rely on implicit consent and expectations established by everyday interactions.
Formation Process: Unilateral vs Implied Contracts
Unilateral contracts are formed when one party makes a promise in exchange for the other party's performance of a specific act, which creates an obligation only upon completion of that act. Implied contracts arise from the conduct or circumstances of the parties, indicating mutual agreement without explicit verbal or written terms, relying on inferred intent. The formation process of unilateral contracts depends on clear offer and acceptance through performance, while implied contracts require interpretation of behavior to establish consent and terms.
Legal Enforceability and Requirements
Unilateral contracts become legally enforceable once the offeree performs the requested act, demonstrating acceptance without a formal promise, whereas implied contracts are formed through the conduct of the parties, reflecting mutual agreement without explicit terms. Legal enforceability of unilateral contracts hinges on clear offer terms and completion of the specified performance, while implied contracts require consistent behavior indicating acceptance and intent to contract. Courts establish implied contracts based on factual circumstances and reasonable expectations, ensuring obligations arise from parties' actions rather than written or spoken words.
Examples of Unilateral and Implied Contracts
A unilateral contract is exemplified by a scenario where a person offers a reward for finding a lost dog, and the contract is accepted only when someone returns the dog, fulfilling the specified condition. An implied contract can be seen in everyday situations like dining at a restaurant where the customer's order and the restaurant's service create an unspoken agreement to pay once the meal is served. Both types of contracts rely on different forms of mutual consent: unilateral contracts depend on performance of a specific act, while implied contracts arise from actions or circumstances indicating agreement.
Differences Between Unilateral and Implied Contracts
Unilateral contracts involve a promise in exchange for a specific act, where only one party makes a binding commitment until the act is completed, such as a reward offer for finding a lost pet. Implied contracts, on the other hand, arise from the conduct or circumstances of the parties, indicating mutual agreement without explicit words, like when a customer orders a meal at a restaurant, creating an obligation to pay. The main difference lies in the formation: unilateral contracts depend on performance for acceptance, whereas implied contracts are inferred from actions or situations signaling consent.
Advantages and Disadvantages of Each Contract Type
Unilateral contracts offer clear performance-based obligations, ensuring parties are bound only upon completion of a specific act, which reduces initial risks but may cause uncertainty for the promisee. Implied contracts provide flexibility through inferred terms based on conduct or circumstances, facilitating smooth transactions without formal agreements, yet they can lead to disputes over the exact terms and obligations. While unilateral contracts emphasize explicit, one-sided promises favorable for task-specific agreements, implied contracts support ongoing relationships but may compromise clarity and enforceability.
Common Legal Issues and Disputes
Unilateral contracts often face disputes related to the fulfillment of conditions by the performing party, such as determining whether the requested act has been completed to trigger the offeror's obligation. Implied contracts commonly involve issues surrounding the courts inferring mutual assent and the scope of terms based on conduct, leading to disagreements about the existence or terms of the agreement. Both contract types frequently encounter challenges in proving consent and the intention to create legal relations, impacting enforceability in legal proceedings.
Unilateral Contract Infographic
