Texas A&M University (TAMU) MGMT209 Practice Exam

In a unilateral contract, one party makes a promise that is contingent upon the performance of a specific act by another party. This type of contract typically does not require the second party to make a promise in return; instead, the contract is formed when the other party completes the required action. A classic example of a unilateral contract is a reward system, where one party promises to pay a reward if someone finds and returns a lost item. Here, the promise to pay is made, but the contract is only fully realized when the act of returning the item is completed. In contrast, a bilateral contract involves a mutual exchange of promises where both parties agree to fulfill their respective obligations. An expressed contract is one where the terms are clearly stated either verbally or in writing, and an implied contract is formed based on the conduct of the parties involved rather than explicit promises. Each of these other contract types functions differently from a unilateral contract, highlighting the unique nature of the one-sided agreement characteristic of unilateral contracts.