What type of contract requires only one party to make a promise?

A unilateral contract is a type of contract in which only one party makes a promise or offers a performance in exchange for a specified act or forbearance from another party. In this situation, the second party is not obligated to perform any action; however, if they do fulfill the terms of the contract, the first party must uphold their promise. A common example of a unilateral contract is a reward offer, where one person promises to pay a reward to anyone who finds and returns their lost pet. In this case, the person offering the reward is the only one making a promise, while the finder of the pet is not making any promise to return it.

Understanding the nature of this type of contract is crucial, especially in title insurance and real estate transactions, where agreements and obligations may stem from unilateral contracts, often leading to various legal implications.