What type of contract is formed when an act is done in consideration for a promise?

A unilateral contract is formed when one party makes a promise in exchange for the performance of an act by another party. In this case, the act is done specifically in consideration of the promise made. The promisor's obligation is contingent upon the performance of the act, which means that the contract is binding only when the specified action is completed. For example, if someone promises to pay a reward for the return of a lost item, the contract is unilateral because the payment (the promise) is only owed if the act of returning the item is performed.

This concept distinguishes unilateral contracts from bilateral contracts, where both parties make promises to each other. In a unilateral contract, only one party's promise is dependent on the other's performance of an act, which makes it unique in the realm of contract law. Understanding this fundamental characteristic helps clarify how unilateral contracts function compared to other types of agreements.