Contracts may be classified as either bilateral or unilateral. In a bilateral contract, both parties promise to do something; one promise is given in exchange for another. A Real Estate lease is a bilateral contract because the Landlord provides temporary shelter to a Renter in exchange for rent.
A unilateral contract, on the other hand, is a one-sided agreement. One party makes a promise to induce a second party to do something. If you wash dishes, I will give you $5.00. The second party is not legally obligated to act. However, if the second party does comply – washes the dishes – the first party is then obligated to keep the promise – pay the $5.00. An option contract to retain an exclusive right to possibly make a purchase later is an example of a unilateral contract. The Optioner (Owner) does not have the right to act. Only the Optionee (buyer) has the right to agree to buy the property or not.
