A unilateral contract is a promise for an act—here’s how it works in real estate.

Unpacking the Promise: When One Side Sets the Task and the Other Chooses to Act

If you’ve ever offered a reward for something lost, you’ve stumbled upon a simple legal idea that shows up in real estate and many other arenas: a unilateral contract. It’s the kind of agreement where one party makes a promise that hinges on a specific act by someone else. No obligation on the other side to do anything until that someone acts. Then, and only then, does the promise become binding.

What exactly is a unilateral contract?

Think of a classic scene: a homeowner loses a ring and says, “I’ll pay $1,000 to whoever returns it.” The homeowner is promising money, but the catch is that the contract isn’t formed until the ring is actually returned. Until then, the offer sits out there, waiting. That’s the essence of a unilateral contract: a promise by one party, conditioned on the other party performing a defined act.

This is different from other contract types, and that difference matters in real estate.

A quick contrast—why this matters in real estate

• Bilateral contract: Here both sides make promises. Think of a typical home sale where the seller promises to transfer title and the buyer promises to pay the agreed price. Both sides have obligations from day one.

• Executed contract: Everything’s done. The buyer and seller have finished their promises, and the contract is fully performed or closed.

• Expressed contract: The terms are spelled out clearly, either in writing or spoken aloud. In real estate, most of what we deal with is expressed, with written agreements that lay out price, dates, and duties.

A unilateral contract sits a bit apart because the big promise exists, but no one is bound to act unless someone actually performs. That distinction can feel subtle until you see it in a real-world scenario.

Where unilateral contracts pop up in Arizona real estate

• Reward-style incentives: A landowner or broker might offer a bonus or reward for a specific action—like finding a qualified buyer or locating a particular kind of property. The promise is clear: pay if and when the action occurs. The agent or finder isn’t obligated to look, but if they act and complete the task, the reward becomes due.

• Contingent performance promises: In some creative deal structures, a party might promise payment if a buyer brings a certain property under contract by a deadline. The buyer isn’t required to perform unless they meet the criteria, but if they do, the other party pays.

• Demonstrating value: Sometimes, a seller might promise a payment to anyone who helps bring a deal to a close under specific conditions. The recipient’s performance—fulfilling the task—triggers the payment.

In all these scenarios, the hallmark is the one-sided promise that ripens into a binding obligation only when a particular act is completed by someone else.

How to recognize a unilateral contract in plain talk

• Look for performance-based triggers: If the contract promises payment or other benefits only after someone performs a defined act, that’s a big clue.

• Check who is obligated to act: In unilateral contracts, the promisor’s obligation is the promise itself; the offeree is free to act or not. If the other party ignores it, no breach occurs because there’s no obligation to act yet.

• Watch for open-ended terms: A unilateral offer usually doesn’t bind the offeree to do anything unless they choose to complete the act. Clarity about what counts as performance is essential.

• Notice the potential revocation nuance: In classic unilateral contracts, the offeror typically can revoke the offer until performance begins—or until the act is completed, depending on the jurisdiction and the precise language. The sooner the performance is underway, the murkier revocation becomes. When a reward is at stake, the practical rule is that once someone starts performing, the offer can’t be revoked in a way that defeats the performance.

Real-world implications for Arizona professionals

• Clarity protects everyone: If you’re drafting or reviewing a contract that includes a performance-based payment, spell out what counts as performance, the time frame, and any conditions that could affect payment (like meeting specific criteria or delivering documents on a deadline). The clearer the language, the fewer misunderstandings later.

• The role of communication: With unilateral promises, you’re banking on the other party’s decision to act. Clear notice and defined channels for performance help prevent disputes. A simple written clause that says, “Payment will be made within 10 business days after the performed act is completed and verified” goes a long way.

• Anticipate possible confusion with common real estate transactions: If you’re involved in referrals, broker bonuses, or finder’s fees, make sure the contract distinguishes between a bilateral commission (earned upon closing) and a unilateral reward (triggered by performance). The two can coexist, but they must be carefully separated to avoid double obligations or missed payments.

Simple examples to anchor the concept

• Classic reward: “I’ll pay you $2,000 if you return my lost dog.” The promise exists, the act is the return. The dog owner isn’t obligated to offer a reward to everyone, and the dog’s return creates a clean trigger.

• Finder’s incentive in a sale: “If you bring a buyer who closes on a property by the end of the month, I’ll pay you a $5,000 bonus.” The offeree isn’t required to bring a buyer, but if they do, and the sale closes within the specified window, the promisor must pay the bonus.

Where things can get tricky

• Blended promises: Some contracts mix unilateral and bilateral elements. For instance, a seller might promise to pay a finder a fee if the finder brings a buyer who signs a purchase agreement, but the actual payment happens only at closing. Here, you’ve got a hybrid setup. It’s still important to separate the performance-based trigger from ongoing obligations.

• Ill-defined performance: If a clause says, “the buyer’s performance will be acceptable,” without defining what acceptable means, dispute is likely. In real estate, precision matters—from what constitutes a “qualifying buyer” to how long the performance window lasts.

• Revocation risk: If the offeror tries to revoke a unilateral offer before any performance begins, the other party may still have a claim once performance occurs, depending on local law and the contract’s wording. That’s why many practitioners keep unilateral offers tightly drafted and time-bound.

Practical takeaways for practitioners

• Favor explicit language: When a payment or benefit depends on someone’s action, write it down clearly. Define the action, the timing, the method of verification, and any conditions that could affect entitlement.

• Separate promises from performance outcomes: If you’re mixing elements, map them out so it’s obvious what’s a reward versus what’s a commission or salary.

• Consider the bigger picture: Unilateral contracts can be powerful tools for encouraging action, but they’re easy to misread. Use them when you need a nudge rather than when you’re creating a long-term obligation.

• When in doubt, get it in writing: Verbal promises easily drift into misunderstandings. A concise written clause preserves intent and reduces surprises at the closing table.

A few thoughts to keep the conversation grounded

We all love simple decisions, don’t we? A clear promise with a clear trigger can save a lot of headaches later on. Unilateral contracts remind us that law isn’t just about who signs first; it’s about what happens after someone acts. In real estate, that can mean the difference between a deal that closes smoothly and a dispute that lingers long after a key exchange.

If you’re ever reading a contract and the promise feels one-sided, pause and ask: What act is supposed to happen? Who is free to act? What counts as performance? Are there any deadlines or conditions tied to payment? Answering these questions can turn a murky clause into a solid, enforceable agreement.

Two quick analogies to keep in mind

• Rewards and scavenger hunts: A reward for finding a missing item is the most recognizable example. The moment someone completes the search and returns the item, the promised payment is due.

• Contest prizes: A flyer promising a prize to the first person who submits a qualifying bid is another flavor of unilateral contract. The act of submission triggers the reward.

A final thought

Unilateral contracts aren’t the most common contract form you’ll see day to day in real estate, but they show up in helpful, practical ways. They’re tools for motivating action when a one-way promise is the right move. So next time you read a clause that promises payment upon achievement, you’ll know exactly what’s going on—and you’ll spot the details that keep everyone on the same page.

If you’d like to talk through a real-world example you’ve encountered or you’re curious about how a unilateral element could fit into a deal you’re considering, I’m happy to explore it with you. Real estate contracts are a language of their own, and getting the grammar right makes all the difference.