A unilateral contract is one in which the offeror is bargaining for a completed performance. For example an offer of a reward to catch a fugitive (or a fish) is an offer that looks towards the formation of a unilateral contract.
A bilateral contract is one inwhich the offeror is bargaining for a promise to perform. Most contracts which have commercial significance are bilateral.
The Brooklyn Bridge hypothetical has been
a favorite of Contracts professors ever since it was introduced by Professor
Rene Wormser. Typically the hypo goes like this: "A promises B $100 if
the latter will walk across the Brooklyn Bridge." Is A bargaining for B's
promise to walk across the bridge or is he bargaining for actual performance,
i.e., completely walking the length of the bridge? The answer is that A
is bargaining for a complete performance. The offer is not accepted and
a contract is not formed until B completes the requested act of walking
across the bridge.
What if B starts to walk across the bridge
in response to A's offer but when she is halfway across the bridge, A drops
down from the sky in a parachute and shouts "I revoke." Is B's power to
accept the offer by completing performance terminated? Professor Wormser
originally argued that it was. After all, if the only way to accept an
offer to enter into a unilateral contract was by completely performing,
and the offeror retained his power to revoke or withdraw the offer any
time prior to acceptance, then it follows logically that A could effectively
revoke the offer because there has been no acceptance until B has walked
the entire length of the bridge.
However, Rest.2d §45 states a different
rule holding that A's offer is in effect an option
contract in that once B has started to perform A is not free to withdraw
the offer until B has had a reasonable time to complete performance. Eventually
Wormser came around to the Restatement view: "Since that time I have repented,
so that now, clad in sackcloth, I state frankly that my point of view has
changed. I agree, at this time, with the rule set forth in the Restatement
. . . ." (Book Review, 3 J.Legal Ed. 145 (1950)
