How is a unilateral contract defined?

A unilateral contract is defined as a promise made by one party in exchange for an act performed by another party. This means that only one party makes a promise, while the other party is not required to provide a reciprocal promise but rather fulfills the contract by performing a specific action.

For instance, if someone offers a reward for the return of lost property, the offeror's promise to pay the reward is contingent upon the return of the property. The contract becomes binding when the other party completes the act of returning the lost property, thus fulfilling the terms of the unilateral contract. This distinguishes it from a bilateral contract, where mutual promises are exchanged between both parties.

In contrast to the other options, which describe different types of contracts or conditions, the definition provided in the correct choice precisely encapsulates the essence of a unilateral contract's structure and function in contract law.