What type of contract involves one party making a promise while the second party is not legally bound to perform?

The correct answer is a unilateral contract. In a unilateral contract, one party makes a promise or commitment, and the other party is not obligated to make any counter-promise or perform any duties. Instead, the second party can choose to accept the offer by fulfilling the conditions set by the promisor. A common example of a unilateral contract is a reward offer; for instance, if someone offers a reward for the return of a lost pet, they are making a promise to pay a specific amount if someone finds and returns the pet. The person who finds the pet is not obligated to search for it or return it, but they can choose to do so and thereby accept the contract.

In contrast, a one-sided contract refers to a situation where only one party has obligations, but it is not a recognized legal term in the context of contracts—it’s more of a misunderstanding of contract terminology. A bilateral contract involves mutual promises where both parties are bound to perform; each party is responsible for fulfilling their respective obligations. An implied contract forms through actions and circumstances rather than explicit words. Therefore, understanding the nature of these contracts clarifies why a unilateral contract is defined by its one-sided promise effectively.