Ohio Surety Bail Agent Practice Exam

What characterizes a "Unilateral" classification of a contract?

1. Mutual exchange of promises to perform

2. When one side makes the promises

3. Fully performed by all parties

4. Obligations expressed by implicit agreement

The correct answer is: When one side makes the promises

A unilateral contract is characterized by the situation in which only one party makes a promise or obligation to perform. In this type of contract, one party promises to do something in exchange for a specific act by the other party. For example, a common instance of a unilateral contract is a reward offer: if someone offers a reward for the return of a lost item, only the person providing the reward is making a promise, while the person finding and returning the item is not bound by any promise until they perform the action. This understanding highlights the fundamental nature of unilateral contracts, differentiating them from bilateral contracts, where there is a mutual exchange of promises. The other options pertain to features of contract classifications that don't align with the concept of unilateral contracts, focusing instead on scenarios involving mutual obligations or implicit agreements that require action or agreement from both parties.