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Which of the following is true about a unilateral contract?

1) It refers to a promise for a promise.
2) It is a promise in exchange for performance.
3) It is not a real contract because it lacks consideration.
4) It is a real contract because it is a mutual exchange of value.

User Thwd
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1 Answer

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Final answer:

A unilateral contract is correctly described as a promise in exchange for performance. It is a valid, enforceable contract where the promisor is bound to fulfill their promise once the promisee completes the specified action.

Step-by-step explanation:

The subject in question is a unilateral contract. The correct statement about a unilateral contract is: "It is a promise in exchange for performance". Unlike bilateral contracts, which involve a promise for a promise, unilateral contracts involve one party making a promise that the other party can accept only through an action or performance. The person who makes the promise is bound to fulfill the promise if the other party accomplishes the task or performance.

In the context of enforceability and consideration, it's important to refute the notion that a unilateral contract is not a real contract due to lack of consideration. A unilateral contract does involve consideration, which is the act or performance that the promisee complete in exchange for the promisor's promise. This dynamic is often seen in reward situations, where a reward is offered for the return of a lost item or for providing information. The offeror (promisor) is obliged to pay the reward only if someone (promisee) performs the task stipulated.

User Zizoo
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