Wisconsin Real Estate Sales Practice Exam

Which is an example of a unilateral contract?

1. Sales Agreement

2. Offer to Purchase

3. Lease Agreement

4. Option to Purchase

The correct answer is: Option to Purchase

A unilateral contract is a type of agreement where only one party makes a promise or commitment, and the other party has no obligations until they fulfill a specific condition. The correct answer, the "Option to Purchase," exemplifies this concept because it involves a promise from one party (the seller) to sell a property to another party (the buyer) at a specified price, but only if the buyer chooses to exercise that option within a certain timeframe. In this scenario, the seller is bound to sell if the buyer decides to proceed, but the buyer is not obligated to make a purchase unless they actively choose to exercise the option. This conditional promise creates a unilateral obligation, making it distinct from other types of contracts listed. In contrast, a sales agreement or lease agreement typically involves mutual promises from both parties, and an offer to purchase may initiate a mutual agreement but does not, in itself, establish the unilateral nature of a contract.