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  1. While trying to modify as little as possible, how can I make the bilateral sales contract in Practical Example 1 unilateral?

  2. What if I copy and paste Practical Example 2 and modify like it this?

Daniel [Alex] offers (or promises) a free watch [a bicycle] to anyone who three tokens from the packets of cereal he manufactures, together with a cheque for £5 [pays him £150].

But then doesn't my edit become a bilateral contract?

Poole, Shaw-Mellors. Contract Law Concentrate (4 ed 2019). p 5.

The key distinction: bilateral and unilateral agreements

Broadly, agreements will be one of two types: • bilateral • unilateral.

Definition

Bilateral agreements: by far the most common in practice and consist of a promise in exchange for a promise. Bilateral means both parties are bound on the exchange of promises, although there has yet to be any performance of those promises.
      A typical sale of goods agreement is bilateral.

Practical example 1

Alex offers (or promises) to sell his bicycle to Becky for £150 and Becky accepts, thereby promising to pay £150. (We will use this as our example of a bilateral agreement and look at variations and additions to the facts throughout this chapter.)

Definition

Unilateral agreements: consist of a promise in exchange for an act. It follows that only one party is bound at the outset by a promise. The other’s acceptance is the performance of the requested act.
      For example, a typical unilateral agreement will involve an offer of a reward and may be phrased as an ‘if’ contract: I promise to pay £50 to anyone who finds and returns my lost dog.

Practical example 2

Daniel offers (or promises) a free watch to anyone who returns three tokens from the packets of cereal he manufactures, together with a cheque for £5. Emily accepts by returning the three tokens with her cheque for £5. (We will use this as our example of a unilateral agreement and return to this example later in the chapter.)

p 6.

Making the correct distinction.

It is not possible to accept a unilateral offer by promising to find and return the lost dog or by promising to collect and return the tokens and the cheque. By comparison, the agreement to sell the bicycle cannot be unilateral. Students sometimes suggest that a simple sale contract is unilateral by interpreting the act of paying for the bicycle as the requested act. This is incorrect since, as long as it is possible to accept by promising to buy (which it is in the example), the agreement will be bilateral.

  • Why do you think "Alex offers a bicycle to anyone who pays him £150" is a bilateral contract? Who is the second party that is bound to the terms of this contract? – Philipp Mar 19 at 15:51
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how can I make the bilateral sales contract in Practical Example 1 unilateral?

The contract would be unilateral if Practical Example 1 ("Alex offers (or promises) to sell his bicycle to Becky for £150 and Becky accepts, thereby promising to pay £150") were modified as follows:

Alex offers to sell his bicycle to Becky for £150, and Becky pays £150.

That is because "[a] unilateral contract is one in which the promisor does not receive a promise in return as consideration", In re Certified Question, 432 Mich. 438, 446 (1989). In this modification of Practical Example 1, Alex is not receiving a promise. Instead, he is receiving the amount of money he requires for giving the bike away.

What if I copy and paste Practical Example 2 and modify like it this?

[...]

doesn't my edit become a bilateral contract?

No, the contract remains unilateral. For it to become bilateral, Alex would have to be open to receive a promise (whether of payment or of any other sort of consideration) in exchange for the bicycle.

What's the tiniest modification necessary to convert a bilateral, to unilateral, sales contract?

The modification consists of precluding any exchange of promises, and instead requiring the promisor to do good on his promise once a counterparty performs the act(s) the promisor formulated as condition(s) for fulfilling his promise.

Note that the issue of being unilateral or bilateral is mostly pointless for deciding contract disputes. In fact, footnote 10 of In re Certified Question reads:

[D]efinitions of unilateral and bilateral contracts were not included in the Second Restatement of Contracts, because of doubt as to the utility of the distinction.

(quotation marks omitted)

The fact that "its use by appellate courts has increased", Id., does not imply that the distinction between unilateral and bilateral contracts is any relevant for ascertaining which party breached a contract and/or the award to which a wronged/injured party would be entitled.

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  • Thanks Inaki as always! You cited a Supreme Court of Michigan, and I know you've lived in Michigan, but my question involved English law. Do you know of any English cases? – Chgg Otrk Well Mar 26 at 19:12
  • @Ghreu You're very welcome. Although I am not knowledgeable of English precedents on this, I highly doubt there is any material difference, since the remark from In re Certified Question is equivalent to how the topic is covered in the textbook (which in turn seemingly is premised on English law). It is likewise doubtful that under English law an agreement being unilateral versus bilateral would make any difference when it comes to identifying the parties' rights and duties. – Iñaki Viggers Mar 26 at 20:26
  • @Ghreu I can provide an example of relevant case law for unilateral contracts: Carlill v. Carbolic Smoke Ball Co. [1893] EWCA Civ 1 – Matthew Aug 21 at 14:16

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