A unilateral contract is one in which one party has obligations but the other does not. Unilateral contracts sometimes occur in sport in circumstances where a reward is involved. Party A offers a reward to Party B if they achieve a particular aim. If Party B is successful they get the reward but if they unsuccessful they receive no reward and equally they have no obligation to Party A.
Legal principles about unilateral contracts arose from the case of Carlill v Carbolic Smoke Ball Co. 1893.
The Carbolic Smoke Ball Company, during an influenza epidemic, placed an advertisement indicating that they promised to pay £100 to anyone (hence a unilateral contract) who caught influenza after using their ball as indicated for two weeks. They had deposited £1000 in a bank account as a gesture of good faith.
Mrs Carlill purchased the ball, used it as directed, but caught influeza and sued the Carbolic Smoke Ball Co. who then refused to pay.
The court awarded Mrs Carlill damages of £100.
Points of Law:
So, if a person offers a reward to anyone who achieves a certain objective as desired by the offerer, then it is probable that who ever makes the offer will have to pay to persons who are successful.