A unilateral offer is a promise that turns into a binding contract only when someone completes a specific act the offeror asked for. The classic example is a reward poster: no one has to look for the lost dog, but whoever finds and returns it has an enforceable claim to the money the moment the act is done. Until then, the person who posted the reward owes nothing, and no one is on the hook to try.1LII / Legal Information Institute. Unilateral Contract
What Makes an Offer Unilateral
Two parts have to be there. The offeror has to make a clear promise of what they will give, and the offer has to identify the specific act someone must perform to earn it. The terms need to be definite enough that both sides can tell whether performance happened. If the offer is too vague about what counts, a court may find there was never an enforceable contract to begin with.
The leading illustration is still Carlill v. Carbolic Smoke Ball Co., an 1893 English decision American courts routinely cite. A company advertised that it would pay anyone who used its product as directed and still caught the flu. When a customer did exactly that and sued, the court held that “this advertisement is an offer to pay 100l. to anybody who will perform these conditions, and the performance of the conditions is the acceptance of the offer.”2Justia Law. Carlill v Carbolic Smoke Ball Co The feature that sets this kind of offer apart is that the offeree is never obligated to act. If no one tries, no one has breached. But as soon as someone finishes the requested act, the offeror is bound.1LII / Legal Information Institute. Unilateral Contract
How You Accept
You accept a unilateral offer by doing the thing, not by saying you will. You do not need to call ahead or sign anything. The performance is the acceptance. A software company that offers $500 for reporting a specific vulnerability is bound the moment a researcher finds and reports it under the stated terms. An employer that promises a bonus for exceeding an annual quota owes the bonus the moment the salesperson clears the number.
You Have to Know the Offer Exists
There is a catch that trips people up. In most courts, you have to know about the offer before you perform. Someone who returns a lost dog without ever seeing the reward poster usually gets nothing, because acceptance requires an intent to accept, and you cannot intend to accept something you were unaware of. This matters most with public rewards, where a stranger can perform the requested act by pure coincidence.
When You Have to Give Notice
Finishing the act is usually enough on its own. But if the offeror has no reasonable way to find out that you performed, the rules shift. Under the Restatement (Second) of Contracts, when you have reason to know the offeror will not learn of your performance promptly, their obligation is discharged unless you make a reasonable effort to notify them or they learn of it within a reasonable time.3H2O. R2K Section 54 A lot of claims die quietly here. The person performs, assumes word will get back, says nothing, and by the time they ask for payment the duty is gone.
Can the Offeror Pull the Offer Back?
The default rule is that any offer can be revoked before it is accepted.4Legal Information Institute. Revocation Taken literally, that would let a homeowner who offered a neighbor $500 to paint a fence watch the neighbor finish three-quarters of the job and then revoke before the last coat dried. Courts rejected that result.
Starting Performance Locks the Offer In
Modern law handles the problem through what the Restatement (Second) of Contracts calls an option contract created by part performance. Once you begin the invited performance, the offeror can no longer revoke, and must keep the offer open long enough for you to finish. The offeror’s duty to actually pay still depends on you completing the work; walk away halfway through and you are owed nothing.5H2O. R2K Section 45
The dividing line is between beginning the work and merely getting ready to do it. Buying the paint and brushes is preparation. Putting paint on the fence is performance. Only performance triggers the protection that makes the offer irrevocable.6Contracts Casebook. Acceptance by Performance – Unilateral Contracts Courts draw the line case by case, but the principle holds: when your effort has become the kind of act the offer called for, the offeror is stuck.
Revoking a Public Offer
A reward or other offer made to the public follows a different revocation rule, because the offeror has no way to contact every person who might have seen it. The U.S. Supreme Court held in Shuey v. United States that a public offer can be withdrawn through the same channel used to publish it, and that a particular claimant’s failure to see the withdrawal does not matter.7Justia. Shuey v United States If the offer was a newspaper ad, a notice placed in the same paper does the job.
How This Differs From an Ordinary Contract
Most contracts people sign are bilateral: a promise for a promise. In a lease, you promise rent and the landlord promises housing, and both sides are bound as soon as they agree. A unilateral contract binds only the offeror, and only once the offeree finishes performing. Until that point, the offeree owes nothing.1LII / Legal Information Institute. Unilateral Contract
The practical consequence is about when either side can sue. In a bilateral deal, both parties can sue for breach from the moment they agree. In a unilateral deal, there is nothing to breach until someone performs. A company running a contest cannot be sued by people who chose not to enter, but once a participant meets every stated condition, the company’s promise is enforceable like any other contract.
If the Offeror Refuses to Pay
Completing performance forms a binding contract, so if the offeror then refuses to pay, you can sue for breach. The usual remedy is expectation damages: the court awards the value of what was promised. A $1,000 reward promise means a $1,000 recovery. In narrower cases, a court may order specific performance, requiring the offeror to do what they promised rather than pay cash, which tends to come up when the promise was something like transferring property. Most disputes are simpler than that: money was offered, someone earned it, and the fight is over whether the performance matched the terms.
Timing matters too. Unilateral offers are often not written down, which can put them in the category of oral contracts. State statutes of limitations for oral contracts vary, generally running two to five years. Waiting too long to demand payment or file suit can wipe out an otherwise valid claim.