What happens in a unilateral contract if the performance is not completed?

Study for the Business Law Test. Use flashcards and multiple choice questions, each equipped with hints and explanations. Prepare for your exam with confidence!

In a unilateral contract, one party makes a promise in exchange for the action of another party. The essence of such contracts lies in the performance of the obligated party to fulfill the terms of the contract. If the performance is not completed, the party who made the promise (the offeror) remains bound by their promise until the performance is fulfilled or the contract is otherwise terminated by the terms specified within it or due to legal reasons.

The contract is not automatically void; rather, it continues to exist until the conditions of performance are adequately addressed. This means that if the offeree does not perform the act requested, the offeror cannot be compelled to fulfill their promise, but their obligation stays intact until the contract is formally fulfilled, revoked, or legally nullified. Therefore, the integrity of the unilateral contract remains binding, irrespective of whether the promised action was completed.

This context clarifies why the choice regarding the binding nature of the contract is the most appropriate answer in this scenario.

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