Nevada Life & Health Insurance Practice Test 2025 – Complete Exam Prep

A unilateral contract signifies that only one party has an obligation to perform, making it essential to understand how such contracts function within the context of agreements. In a unilateral contract, one side, typically the offeror, makes a promise in exchange for a specific act from the other side, the offeree. The offeree is not obligated to act; however, if they choose to fulfill the terms of the contract, the offeror becomes bound to provide the promised consideration.

This type of contract often appears in situations such as reward offers, where one party promises payment for the completion of a task, like finding a lost pet. The responder is not required to find the pet, but if they do, the offeror is obligated to pay the reward.

Understanding this structure clarifies that the responsibilities in a unilateral contract rest solely with one party, supporting the notion of a single-sided commitment.