What distinguishes bilateral contracts from unilateral contracts?

The distinguishing feature between bilateral and unilateral contracts lies in the nature of the promises involved. In a bilateral contract, both parties exchange promises to perform certain actions or provide something of value to each other. This mutuality creates a binding agreement where each party has obligations to fulfill.

On the other hand, a unilateral contract is characterized by one party making a promise that is contingent upon the performance of an act by another party. The contract is only formed when the second party completes the action, which is why it lacks the mutuality found in bilateral contracts. A classic example of a unilateral contract is a reward offer; the offeror promises to pay if someone performs a specific act, such as finding a lost dog.

The other options do not accurately reflect the fundamental differences between these types of contracts. Contracts do not necessarily have to be in writing to be enforceable, which eliminates the possibility of requiring a written document for both types. Thus, recognizing the essential aspect of mutual promises in bilateral contracts and the performance condition in unilateral contracts clarifies why the chosen answer is correct.