What It Does
For in-house counsel, the label matters when someone wants to revoke an offer and when a published program operates as an offer to anyone who performs. Restatement (Second) of Contracts section 32 treats a doubtful offer as inviting acceptance by promise or performance, so choose the structure deliberately.
A practical test: set the signature block aside and ask what the other side has promised. If the answer is nothing, and only an act earns your company's promise, the agreement is unilateral and revocation is the open question.
Fixes the moment of formation, which decides whether either side can still walk away without breaching.
Identifies who owes a duty, because in the unilateral structure only the offeror is bound and the offeree stays free to stop.
Sets the consideration analysis, since mutual promises supply consideration in a bilateral agreement while the requested act supplies it in a unilateral one.
Controls revocation, because Restatement (Second) of Contracts section 45 turns the offer into an option contract once the offeree begins the invited performance.
Decides whether the offeree owes notice of acceptance, which matters when the offeror has no other way to learn that performance happened.
Across recent SEC exhibits, the unilateral structure turns up mostly in documents nobody negotiates line by line: retention bonus letters, warranty grants, option agreements, and posted program terms that a person accepts by acting.
When You'll See It
Reward, bounty, and referral programs: These promise payment to anyone who performs the stated act. The offeree makes no return promise.
Product and manufacturer warranties: A seller promises repair, replacement, or refund after a defect and the buyer's required act.
Options, warrants, and standing offers: An option or warrant gives the holder a right to accept later, without a duty to exercise.
Retention, commission, and incentive letters: An employer promises payment if an employee stays or hits a target; the act earns it.
Services agreements, MSAs, supply agreements, and mutual NDAs: These are bilateral: both sides promise performance and bind themselves at signature.
Drafting varies most in public rewards, warranties, and incentive letters. When your company makes the offer, performance may create rights before anyone signs.
Compare the structures at five points:
Formation: Bilateral contracts form when promises are exchanged. Unilateral contracts form when the offeree performs; section 50 recognizes acceptance by performance.
Who is bound and when: Both sides owe duties in a bilateral contract. In a unilateral contract, only the offeror is bound until performance.
Consideration: Mutual promises supply consideration bilaterally. The requested act supplies it unilaterally.
Revocation: A unilateral offer may be revoked before performance begins. Section 45 creates an option contract once performance starts; Petterson v. Pattberg, 248 N.Y. 86 (1928), shows the earlier strict rule.
Notice of acceptance: A return promise gives notice in a bilateral contract. For goods, UCC 2-206(2) lets an offeror treat silence as lapse after a reasonable time.
For goods, UCC 2-206(1)(b) permits acceptance by prompt promise or shipment, so the seller's first act can determine formation.
Examples
Canopy Growth Corporation USA, LLC / Judy Hong
Retention Bonus Letter
Promise conditioned on an act
One-Sided
2024
"We are pleased to offer you a retention bonus of $150,000 USD (one hundred and fifty thousand dollars) subject to statutory deductions and withholdings (the "Retention Bonus"), if you remain employed by the Company between now and October 1, 2025 (the "End Date") ... In the event that you resign your employment between now and the October 1, 2025, you will not have earned the Retention Bonus and therefore will not be entitled to any portion of same."
Greatbatch Ltd. / Electrochem Solutions, Inc.
Supply Agreement
Warranty grant conditioned on notice and return
One-Sided
2024
"Greatbatch warrants that, for the one-year period commencing upon Customer's receipt of the Product, each Product sold under this Agreement will: (a) conform with the applicable Specifications; (b) be free from defects, latent or otherwise, materials, and workmanship ... Subject to the foregoing, if a Product is not as warranted and Customer notifies Greatbatch in writing and returns that Product to Greatbatch within thirty (30) days of Customer's discovery of such warranted defect, Greatbatch will, at its sole option, promptly repair or replace the defective Product or refund the purchase price of the Product."
Alico, Inc. / Board of Trustees of the Internal Improvement Trust Fund of the State of Florida
Option Agreement for Sale and Purchase
Option granted for stated consideration
One-Sided
2023
"Seller hereby grants to Buyer the exclusive option to purchase the real property located in Hendry County, Florida ... This Option Agreement becomes legally binding on execution of this Option Agreement, but exercise of the option is subject to approval by Buyer and is effective only if DSL gives written notice of exercise to Seller. ... The consideration for the option granted by this Option Agreement is $100.00 ("Option Payment")."
SunPower Corporation / Enphase Energy, Inc.
Master Supply Agreement
Reciprocal purchase and sale commitment
Mutual
2018
"On the terms and conditions set forth in this MSA, SunPower agrees to purchase and Enphase agrees to sell to SunPower, a cumulative total of at least [redacted] MLPE Products during the Term (the "Total Purchase Commitment")"
Sage Therapeutics, Inc. / Supernus Pharmaceuticals, Inc.
Mutual Non-Disclosure Agreement
Reciprocal confidentiality obligation
Mutual
2025
"For their mutual benefit, the Parties wish to discuss a possible business relationship and, in connection with such discussions or as part of the resulting business relationship, if any, (collectively, the "Stated Purpose") each Party may disclose or make available to the other Party certain information which the disclosing Party desires the receiving Party to treat as confidential. ... The receiving Party agrees not to use any Confidential Information of the disclosing Party for any purpose other than the Stated Purpose or as otherwise approved in writing by the disclosing Party."
Powerfleet, Inc. / David Wilson
Consultancy Services Agreement
Exchange of promises at signature
Mutual
2026
"Consultant agrees to advise Company leadership on financial, operational, and organizational matters requested by the Company's CEO or designee. ... Company shall pay Consultant fees ("Fees") in the amount of $37,410 U.S. dollars per month during this engagement. Any partial months shall be prorated."
Negotiate
You want the promise to stay under your control until you decide it has been earned.
Say in the document that the offer can be accepted only by completing the described act, so an eager return promise from the other side does not bind you early.
Define the qualifying act precisely enough to tell a completed performance from a partial one. Restatement (Second) of Contracts section 45 hands the offeree an option contract the moment they begin.
Reserve an express right to modify or withdraw the program going forward, and state what happens to performance already underway.
Require written notice of completion within a stated period, since you may otherwise never learn that someone performed and UCC 2-206(2) reaches only sales of goods.
Cap the program in the document by stating a maximum aggregate payout and a claim deadline, so a promise made to the market does not become an open-ended liability.
You want the offer to stay open long enough for your performance to count.
Get the offer in writing with a stated open period, because an oral standing offer can be revoked before you finish.
Begin the invited performance and document the start date, since section 45 makes the offer irrevocable from that moment in most states.
Ask for a written option with separate consideration when the performance is expensive, which is what the $100 option payment in the Alico agreement above buys.
Pin down what counts as completion and who decides, so the offeror cannot redefine completion after you have incurred the cost.
Send notice of your performance even when the document does not require it, so the offeror has no room to argue the offer lapsed.
Formation language often appears as a single conditional sentence inside a warranty section, bonus letter, or program terms. GC AI's Playbooks hold the formation questions you want asked of every incoming draft, and GC AI for Word runs them inside the document while you are still marking it up.
Red Flags
A published program that promises a payment to anyone who performs, with no stated maximum and no withdrawal mechanism. Every person who begins the described act may hold an option contract under Restatement (Second) of Contracts section 45, so the aggregate exposure has no ceiling.
A "we may modify or cancel at any time" line in a program whose participants have already started performing. Courts in most states will not let a revocation reach performance already begun. The clause creates an unfounded sense of control and invites a dispute over when each participant began performing.
A warranty that conditions the remedy on notice and return but never states the clock or the delivery address. The condition still operates, so a buyer who misses an undefined deadline can lose the remedy and the seller inherits the dispute.
An offer that says acceptance comes by performance only and then asks for a countersignature anyway. The document invites both modes, which is the ambiguity Restatement (Second) of Contracts section 32 resolves in the offeree's favor by letting them choose.
A supposedly mutual agreement in which one side's only promise is to use such efforts as it deems appropriate or to perform at its sole discretion. An obligation the promisor can escape at will may fail as consideration, which can unwind the entire exchange.
FAQs
This content is for informational purposes only and does not constitute legal advice.
