A unilateral contract in real estate is a one-sided promise that only becomes binding when the other party actually performs a specific act. The person making the promise is on the hook; the person who might earn the reward is free to walk away at any point without owing anything. Open listing agreements and option contracts are the two forms you’re most likely to run into, and the way they handle revocation, commissions, and enforcement differs sharply from the standard purchase agreement most buyers and sellers know.
How the Structure Works
One party makes a promise. The other party accepts it by doing something, not by promising something back. In most contracts, acceptance happens when someone signs or says “I agree.” In a unilateral contract, acceptance happens only through complete performance of the requested act.1Legal Information Institute. Unilateral Contract Until that act is finished, no contract exists and the person performing has no enforceable right to payment.
Three elements have to be present. The offer must be clear and specific about what act is required; vague promises like “I’ll take care of you if you help me sell this place” won’t hold up. There must be consideration, meaning something of value exchanged, and the offeree’s completed performance supplies it. And both sides must intend to create a legally binding relationship rather than a casual arrangement.
Where You’ll See It in Real Estate
Open Listing Agreements
An open listing is the textbook case. The owner tells multiple agents, in effect: bring me a buyer and close the sale through you, and I’ll pay a commission. No single agent has exclusivity. No agent is obligated to market the property or spend a dollar on it. The owner owes a commission only to the agent who actually produces a successful buyer.
The downside is predictable. Agents tend to invest less effort in open listings because there’s no guarantee of getting paid. Weeks of showings can evaporate the moment another agent closes a deal first. That risk is built into the unilateral structure, which is why most agents prefer exclusive listing agreements.
Option Contracts
An option contract gives a potential buyer the right, but not the obligation, to purchase a property at a set price within a defined timeframe. The buyer pays an option fee upfront, and in exchange, the seller commits to keeping the offer open. If the buyer exercises the option, the seller must sell at the agreed price. If the buyer lets the option expire, the seller keeps the fee and is free to sell to anyone else.2Legal Information Institute. Option
Investors use options to lock in a price while they conduct due diligence, secure financing, or wait for zoning approvals. A developer might option a parcel for 90 or 180 days while testing whether the site works for a planned project. The option fee is almost always nonrefundable, though it’s typically a fraction of the purchase price, so the downside stays limited.
Deadlines are decisive. If the contract includes a “time is of the essence” clause and the buyer misses the exercise deadline by even a day, the option dies and the seller owes nothing. Courts are strict about this because the seller gave up the ability to sell to someone else during the option period, and that sacrifice only makes sense if the timeline is honored.
Finder’s Fees and Developer Bonuses
The same structure shows up in finder’s fee arrangements. A company might promise a flat fee to anyone who introduces them to an off-market property they later acquire. A developer might offer a cash bonus to the first person who identifies a parcel meeting specific criteria. One party makes a promise, and the other earns it only by delivering a result.
How It Differs From a Bilateral Contract
Most real estate contracts are bilateral. A standard purchase agreement is bilateral because both sides make promises at the same time: the buyer promises to pay a specific price, and the seller promises to transfer title. Both are immediately bound the moment they sign, and either can be sued for backing out.
A unilateral contract flips that. Only the offeror is bound, and only after the offeree performs. Before performance, the offeree can walk away without consequence.1Legal Information Institute. Unilateral Contract The practical consequence shows up in remedies. If a buyer breaches a bilateral purchase agreement, the seller can sue immediately because the buyer’s promise was binding from the start. In a unilateral arrangement, there’s nothing to breach until the offeree has fully performed. An agent who spent three weeks marketing a property under an open listing but hasn’t produced a buyer has no breach-of-contract claim if the owner switches to a different agent.
Can the Offer Be Pulled Back After Someone Starts Performing?
This is the hardest question the structure raises. Under the old common law rule, an offeror could revoke at any time before performance was complete, which produced results that felt plainly unfair. Picture an agent who has shown a property 30 times, lined up a qualified buyer, and is days from closing when the owner yanks the open listing.
Modern courts have largely rejected that approach. The widely adopted rule, reflected in the Restatement (Second) of Contracts § 45, is that once the offeree begins performing, an option contract is created and the offeror must give a reasonable opportunity to finish.1Legal Information Institute. Unilateral Contract The offeree still isn’t required to complete performance, but if they do, the offeror has to honor the promise. The rule exists to stop people from dangling rewards, waiting until someone is almost done, and then snatching the offer back.
Who Earned the Commission
Open listings create a predictable headache: two agents both claim they “found” the buyer and deserve the commission. The procuring cause doctrine sorts this out. Procuring cause refers to the uninterrupted chain of events started by the agent whose efforts ultimately led the buyer to close. It isn’t just about who introduced the buyer to the property. It’s about who sustained the relationship and drove the transaction to completion.3National Association of REALTORS. Appendix II to Part Ten – Arbitration Guidelines
These disputes are typically resolved through arbitration conducted by local or state real estate boards under the National Association of REALTORS® Code of Ethics. Panels look at the entire course of events with no predetermined rules of entitlement. An agent who showed the property once six months ago has a weaker claim than an agent who spent weeks negotiating terms, even if the first agent technically introduced the buyer.3National Association of REALTORS. Appendix II to Part Ten – Arbitration Guidelines The unilateral nature of open listings makes these disputes more common because no exclusive agreement defines who is entitled to compensation.
Get It in Writing
The Statute of Frauds requires contracts involving the sale or transfer of land to be in writing to be enforceable.4Legal Information Institute. Statute of Frauds That covers option contracts, purchase agreements, and in most jurisdictions, listing agreements. A verbal promise to pay a commission or sell at a certain price is essentially worthless if the other side decides not to honor it. Some states recognize oral listing agreements, but enforcing one is an uphill fight.
For option contracts, the writing should include the property’s legal description, the option price, the exercise deadline, and the purchase terms that will apply if the option is exercised. Recording a memorandum of option with the county recorder’s office adds a second layer of protection by putting third parties on notice that the option exists. Recording fees vary by jurisdiction but are generally modest. Skipping this step can be costly if the seller tries to sell the property to someone else during the option period.
What Happens If the Promise Is Broken
When an offeror refuses to honor a unilateral contract after the offeree has performed, courts have several remedies. The most common is monetary damages designed to cover the financial loss, such as an unpaid commission or the difference between the contract price and the property’s current market value.
Specific performance is also available in real estate more readily than in most other areas of law, because every parcel of land is treated as unique. If a seller refuses to honor an option contract after the buyer exercises it, a court may order the seller to complete the sale rather than just pay damages, on the theory that money alone can’t replace a one-of-a-kind property.
Some contracts include liquidated damages clauses that specify a pre-agreed amount if the contract is breached. These are enforceable when the amount reasonably reflects expected losses, actual damages would have been hard to estimate at the time of the agreement, and both parties agreed to the terms in advance. If the clause is unreasonable, courts may treat it as an unenforceable penalty and award actual damages instead.