Which type of contract legally binds only one party to act?

A unilateral contract is a legal agreement where only one party makes a promise to perform an act, while the other party is merely required to perform an action to accept that offer. For instance, if someone offers a reward for the return of a lost pet, the offeror is obligated to pay the reward upon the successful return of the pet, but the person who finds the pet is not obligated to look for it; they can choose to do so or not.

This distinguishes unilateral contracts from bilateral contracts, in which both parties exchange mutual promises and are thus legally bound to perform their respective obligations. In the case of unilateral contracts, the obligation only exists for the person who issued the promise, thereby establishing a one-sided legal obligation until the request is fulfilled.

Understanding the nature of unilateral contracts is crucial in personal lines insurance and related fields, as many agreements in these sectors may involve scenarios where one party's actions trigger obligations from another.