1. Explain fully how bilateral and unilateral contracts differ and what the legal consequences are for each. Give examples.
The purpose of the law of contract is to secure the realization of reasonable expectations induced by promises, and to provide certainty and predictability in the planning of commercial ventures. It establishes and elaborate legal model to support the assurance that these objects will be achieved.
When two people exchange promises-one promise for another-they make a bilateral contract. A bilateral contract is a "promise for a promise".
Irving says to Herman, "Promise to paint my house, and I'll promise to pay you $500:" If Herman promises to do so, he has made a bilateral contract with Irving.
Note the difference between bilateral and unilateral contracts: In a situation involving a unilateral contract, the offeror asks for a return act ("paint my house")-not a promise. However, the offeror who asks for a return promise wants to enter a bilateral contract.
Only a return promise (not an act) will form the contract in a bilateral case.
One other point: a person does not have to use the word "promise" to make a promise. Any words showing you promise (such as "OK" or "I agree") will do.
Unilateral, promise seeks not a return promise, but performance itself. Sometimes made to one party, sometimes to public.
In a unilateral contract, the offer is phrased so that the offeree can accept the offer only by completing the contract performance. A unilateral contract is a "promise for an act".
Person claiming must have knowledge of the offer prior to performing the act, and must perform the requested act
One example is: "I'll pay you $500 (the promise) if you paint my house (the requested act):" The promise is the offer, and the...