In a unilateral contract, who is typically obligated to perform?

In a unilateral contract, only one party is obligated to perform. This structure defines a unilateral contract, where one party makes a promise in exchange for a performance from another party. For example, if one person offers a reward for the return of a lost item, only the person offering the reward has the obligation to fulfill their promise once the item is returned. The other party is not obligated to do anything but may choose to perform the action (returning the lost item) to earn the reward.

In this scenario, the party that is not obligated can decide whether to take the action or not, and their performance is contingent upon their choice. As such, the nature of a unilateral contract clearly establishes a one-sided obligation, providing clarity on how each party's responsibility is defined.