Consider the differences between the bilateral contract and the unilateral contract.?
Question by abhuskey: Consider the differences between the bilateral contract and the unilateral contract.?
In the bilateral contract, we have the offeror willing to exchange a promise for another promise (“I promise to pay you $ 1500.00, if you promise to paint my house on or before Saturday.”).
In the unilateral contract, the offeror is insisting on performance for a promise. (“If you complete painting my house before Saturday, I will pay you $ 1500.00).
Why does the law make such a distinction and why would a party to a contract choose one type over another?
Best answer:
Answer by Mr.Samsa
The law makes this distinction because in the case of a unilateral contract, there is no contract until performance is complete. If the painter only paints half the house, he cannot demand payment since he did not fully perform as required by the offer.
In the case of a bilateral contract, there is an enforceable contract as soon as there is an agreement on the material terms, since both parties are making promises to perform as the consideration for the contract. Therefore, two parties could agree that “I promise to pay you $ 1500 if you promise to paint my house next week.” If the painter paints half the house the following week, he may be entitled some payment, even if he didn’t fully perform as promised. He may be entitled to only quantum meruit, but the painter in the unilateral contract would be entitled to nothing, since he did not fully perform.
A party would agree to the unilateral contract because he wants the money. Maybe the offeror of the unilateral contract is offering a better price than would otherwise be available from other people who need their houses painted. The painter could negotiate with the offeror to agree to a bilateral contract, but it’s really up to the offeror as to whether he would want to make that offer. The offeror has an incentive to use the unilateral contract, because he has no obligation to pay unless the performance is complete.
What do you think? Answer below!