Unilateral contract

Key Takeaways

• A unilateral contract carries an enforceable promise on one side only, so just one party is obligated to perform.
• Acceptance of a unilateral offer happens by performing the requested act, not by promising to perform it.
• A real estate option is the classic unilateral contract: the owner must hold the price open for the agreed period, while the option holder never has to buy.
• In Washington, an open listing carries the same shape, and RCW 19.36.010(5) makes the compensation promise void unless it is in writing and signed by the party to be charged.

What It Means

A unilateral contract binds one party and leaves the other free. One side makes a promise, and that promise ripens into an enforceable obligation only when the other side performs the act the promise asked for. Until the act is done, the second party owes nothing and can simply walk away. Compare that with a Bilateral Contract, where both sides exchange promises up front and both are on the hook from the moment of signing. Most purchase and sale agreements are bilateral: the buyer promises to pay, the seller promises to convey.

The classic real estate illustration is the option. In an Option Agreement, the owner promises to sell at a set price for a set period, and the option holder pays a fee for that promise but takes on no duty to buy. The fee is the Consideration that makes the owner's promise binding. A reward offer works the same way. Whoever returns the lost item performs the act and can collect, and nobody who reads the poster is obligated to go looking.

How It Works in Washington

Washington law does not label contracts unilateral or bilateral, so the classification comes from contract doctrine rather than a statute. What Washington does control is the form these agreements take. An option to buy real property is written and signed, because the sale it sets up has to satisfy the statute of frauds: RCW 64.04.010 requires every conveyance of real estate, or any interest in it, to be by deed, and RCW 64.04.020 requires a deed to be in writing, signed by the party bound, and acknowledged. RCW 19.36.010(1) adds that an agreement not to be performed within one year of the making is void unless written and signed, which reaches an option that runs longer than twelve months.

The version brokers meet most often is the open listing, where a seller owes a commission only to the broker who produces a buyer. RCW 19.36.010(5) makes that promise void unless it is in writing and signed by the party to be charged, so a Washington broker relying on a verbal open listing has no compensation claim.

Example

Kendra wants a Tacoma development site but needs time to get her permits reviewed. She pays the owner, Bill, $5,000 for a 90-day option to buy the lot at $310,000, and the agreement credits the option fee against the price if she exercises. For those 90 days only Bill is bound. He cannot raise the price and he cannot sell to anyone else, while Kendra owes nothing more and can let the clock run out.

On day 62 her permits clear, so she exercises the option in writing. The $5,000 credits to the price, leaving $305,000 due at closing, and the deal converts into an ordinary bilateral Purchase And Sale Agreement with both sides now obligated. Had the review failed on day 89, Kendra would simply have walked, Bill would have kept the $5,000, and neither of them would owe the other anything.

Common Mistakes and Exam Traps

• A unilateral contract is accepted by performing the act, so an offeree who only says yes has not yet accepted.
• An option is unilateral, but the purchase and sale agreement created when the option is exercised is bilateral.
• Unilateral does not mean one-sided or unfair; it describes which side carries the enforceable promise, not who got the better deal.
• Most real estate purchase contracts are bilateral, so an exam answer calling the standard purchase and sale agreement unilateral is wrong.