What type of contract is formed when acts are performed in exchange for a promise?

The correct answer is a unilateral contract. A unilateral contract is characterized by a situation where one party makes a promise in exchange for a specific act by another party. In this type of contract, only one party is bound to fulfill their promise once the other party performs the act.

For instance, if someone offers a reward for finding a lost pet, the promise of the reward is contingent upon the act of finding and returning the pet. The contract is formed when the act is performed; the person who made the offer is obligated to fulfill their promise upon completion of the act.

Understanding this type of contract is important because it highlights the nature of agreements where one party's obligation to perform is dependent solely on the actions of the other party. Such clarity about the structure of unilateral contracts distinguishes them from other contract types, as only one party makes a promise while the other party's participation is active in fulfilling the conditions of the contract.