Which contract type has only one party legally bound to contractual obligations after payment?

The correct answer is a unilateral contract. In a unilateral contract, only one party makes a promise or takes an action, and the other party is not legally bound to act but can choose to accept the offer by fulfilling a condition outlined in the contract. For instance, if someone offers a reward for the return of a lost pet, the person who offers the reward is legally obligated to pay the reward upon the successful return of the pet, while the person finding the pet is not obligated to return it. They do so voluntarily, accepting the contract by performing the action.

In this scenario, the party who promises to pay is the only one held to their word if the specified action (like returning the pet) is completed. This distinctive feature of unilateral contracts is what differentiates them from bilateral contracts, where both parties exchange promises and obligations, making each party accountable to the other. Conditional contracts involve obligations that depend on a specific condition being met, while express contracts are simply agreements that are stated clearly, either verbally or in writing, and don’t inherently imply a one-sided obligation.