Certified Residential Appraiser Practice Exam

Which type of contract involves a one-sided agreement?

1. Bilateral Contract

2. Unilateral Contract

3. Leasehold Estate

4. Periodic Estate

The correct answer is: Unilateral Contract

A unilateral contract is characterized by a one-sided agreement in which only one party makes a promise or undertakes an obligation to perform a certain task or fulfill a condition. The other party is not required to make any commitments in return. A common example of a unilateral contract is a reward offer for a lost pet; the person offering the reward is obliged to pay the amount only if someone finds and returns the pet, but the finder is not obligated to search for the pet or claim the reward. In contrast, a bilateral contract involves a mutual exchange of promises between two parties, where each party's promise serves as consideration for the other's promise. Leasehold and periodic estates are not types of contracts; instead, they refer to legal interests in real property. Thus, the distinguishing feature of a unilateral contract is that it requires an obligation from only one party, making it fundamentally different from the other types mentioned.