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A unilateral contract is an agreement where only one party makes a promise, and the other party doesn't have to promise anything in return. The contract becomes binding when the second party performs an action, rather than making a promise. It's like one person saying, "I'll give you something if you do this task," but the other person is not required to complete the task.
For example, imagine a homeowner offers to pay a real estate agent a bonus if they sell the house within a month. This is a unilateral contract. The agent is not obligated to accept the offer, but if they do sell the house within the specified time frame, the homeowner must pay the bonus.
"A Deep Dive for Real Estate Agents and Appraisers"
Here are some additional points about unilateral contracts that may be helpful for your real estate agent exam:
Acceptance through performance: In a unilateral contract, the second party accepts the contract by performing the requested action. Their performance indicates their acceptance of the terms, and the contract becomes binding.
Revocation: The party making the promise (the offeror) can generally revoke the offer before the other party (the offeree) completes the requested action. However, once the offeree starts performing the action, the offeror may be legally obligated to give the offeree a reasonable amount of time to complete the task.
Option contracts: An option contract can be used in conjunction with a unilateral contract to give the offeree more time to perform the requested action. In an option contract, the offeror agrees not to revoke the offer for a certain period, giving the offeree a guaranteed time frame to complete the task.
Real estate context: In real estate, unilateral contracts often appear as bonus offers, incentives for faster transactions, or other performance-based rewards. They provide a way for one party to motivate another party without creating an immediate binding obligation.
As you study for your real estate agent exam, understanding unilateral contracts will help you better navigate contractual agreements and recognize various strategies used within the real estate industry.
"Wit & Whimsy with the Dumb Ox: Unlocking Knowledge with Rhyme:"
In a world of deals, one type stands alone,
A unilateral contract, its essence is shown.
One person offers, the other may act,
But they're never required to form a pact.
A house to be sold, with a bonus so grand,
If the agent can sell it, as the homeowner planned.
No promise to make, but a challenge to take,
The agent may try, for that bonus to make.
Unilateral contracts, a one-sided deal,
They're based on an action, that's their appeal.
A promise is made, but there's no need to swear,
Just complete the task, and the reward you'll snare.