What does a "unilateral" contract involve?

A unilateral contract specifically involves a single promise made by one party, in this case, the insurer. This is a key characteristic of unilateral contracts, particularly in insurance, where the insurer promises to pay a benefit or provide coverage upon the occurrence of a specified event, such as a loss or claim. The other party, typically the insured, does not make a binding promise in return but instead may have certain obligations under the contract, such as paying premiums.

In insurance, the insurer's promise to pay benefits is the pivotal component of the agreement, while the insured's actions, like maintaining the policy or adhering to its terms, do not constitute a reciprocal promise but may affect the validity of the insurer's obligations. Thus, recognizing the nature of unilateral contracts helps in understanding the dynamics of insurance agreements and the roles of each party involved.