What type of contract is formed when one party makes a promise in exchange for an act?

A unilateral contract is formed when one party makes a promise in exchange for an act performed by another party. This type of contract does not require a promise in return; rather, it is contingent upon the completion of the act. A classic example of a unilateral contract is a reward offer, where one party promises to pay a sum of money to anyone who finds and returns a lost pet. The promise is only binding once the act of returning the pet is completed.

In contrast, a bilateral contract involves an exchange of promises between two parties where each party commits to fulfilling their part of the agreement. An implied contract is established by the conduct of the parties rather than written or spoken words, while an executed contract refers to a contract that has been fully performed by all parties involved. Understanding these distinctions is crucial for recognizing contract types in legal contexts.