Unilateral Contract

AAA

DEFINITION of 'Unilateral Contract'

A legally enforceable promise - between legally competent parties - to do or refrain from doing a specified, legal act or acts. In a unilateral contract, one party pays the other party to perform a certain duty. If the duty is fulfilled, the party on the other side of the contract is obligated to transfer the specified funds. Only this party is under obligation of the contract, whereas the acting party is not legally obliged to perform the duty.

INVESTOPEDIA EXPLAINS 'Unilateral Contract'

Unilateral contracts are a contract type where one party is legally obligated to uphold the terms of the contract. For example, if an individual places an advertisement in the local newspaper to provide an award in the event a missing item is returned, that individual is obligated to pay the award if the item is indeed returned.

RELATED TERMS
  1. Cost-Plus Contract

    An agreement to pay a company for a job based on the amount of ...
  2. Oral Contract

    A type of business agreement that is spoken, not memorialized ...
  3. Breach Of Contract

    Violation of any of the agreed-upon terms and conditions of a ...
  4. Failure To Deliver

    An outcome in a transaction where one of the counterparties in ...
  5. Assignable Contract

    A futures contract with a provision permitting the contract holder ...
  6. Anticipatory Breach

    In contract law, an action that shows a party's intention to ...
RELATED FAQS
  1. Are waivers of subrogation clauses ever ineffective in preventing a third-party lawsuit?

    Sometimes waiver of subrogation clauses are ineffective at preventing a third-party lawsuits. In determining who is responsible ... Read Full Answer >>
  2. What is an alienation clause?

    Whether used in reference to insurance policies, mortgages or commercial loans, an alienation clause stipulates that should ... Read Full Answer >>
Related Articles
  1. Home & Auto

    Exploring Advanced Insurance Contract Fundamentals

    Understanding your contract can help you protect our family's financial security.
  2. Personal Finance

    How To Pick The Right Lawyer

    Find out what factors to consider before hiring an attorney.
  3. Options & Futures

    Moral Hazards: A Bump In The Contract Road

    Learn how this phenomenon can cause a party in an agreement to behave differently than expected.
  4. Entrepreneurship

    Risks Associated With Government Contracts

    Government contracts can be rewarding, but they also come with a variety of risks.
  5. Entrepreneurship

    10 Public Companies That Rely On Govt. Contracts

    We look at 10 of the top public companies whose businesses rely on U.S. government contracts.
  6. Economics

    How Does an Operating Lease Work?

    Operating lease is a term used mostly in accounting to denote a lease that gives the lessee rights to use and operate an asset without ownership.
  7. Entrepreneurship

    Lockheed Martin Is Tight With The US Government

    The relationship between Lockheed Martin and the U.S. government is long-standing and the company's biggest revenue source, but it may be deteriorating.
  8. Home & Auto

    ‘Turnkey’ Properties: A Sensible Investment?

    Turnkey properties can make sense - for people who want a real estate investment without truly being in the real estate business.
  9. Economics

    Understanding Covenants

    A covenant is a term placed in a loan that requires the borrower to either maintain or refrain from certain business activities.
  10. Economics

    What is Earnest Money?

    An earnest money deposit shows the seller that a buyer is serious about purchasing a property.

You May Also Like

Hot Definitions
  1. Hedging Transaction

    A type of transaction that limits investment risk with the use of derivatives, such as options and futures contracts. Hedging ...
  2. Bogey

    A buzzword that refers to a benchmark used to evaluate a fund's performance. The benchmark is an index that reflects the ...
  3. Xetra

    An all-electronic trading system based in Frankfurt, Germany. Launched in 1997 and operated by the Deutsche Börse, the Xetra ...
  4. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
  5. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
  6. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!