Health Insurance Mastery Practice Exam

In which type of contract is only one party's promises enforced?

1. Bilateral contract

2. Unilateral contract

3. Conditional contract

4. Voidable contract

The correct answer is: Unilateral contract

In a unilateral contract, only one party makes a promise that is enforceable. This type of contract typically involves an offer that can be accepted by performance. For example, if someone offers a reward for the return of a lost pet, the offeror (the person who made the promise) is obligated to fulfill the promise if someone successfully returns the pet. However, the person returning the pet is not required to do anything; they are merely taking action to accept the offer. This concept distinguishes unilateral contracts from bilateral contracts, where both parties exchange mutual promises that are enforceable. In a bilateral contract, the commitments from both sides create obligations, whereas, in a unilateral contract, the obligation exists only on the part of the offeror upon acceptance of the offer by the performance of the other party. Conditional contracts and voidable contracts involve different aspects, such as specific conditions that affect the enforcement or validity of the agreement. However, in a unilateral contract, the clarity lies in the enforceability of a single promise contingent upon the actions of another party.