In what type of contract is only one party legally obligated to perform?

A unilateral contract is characterized by the fact that only one party has a legal obligation to perform. In this type of contract, one party makes a promise based on the other party's potential action, and the agreement becomes binding when that action is taken. For example, a common scenario involves a reward for finding a lost pet; the person offering the reward is obligated to pay only if someone successfully finds and returns the pet.

In contrast, a mutual or bilateral contract requires both parties to make promises to each other, establishing mutual obligations. A conditional contract includes obligations that depend on the occurrence of a specified condition. Thus, the defining feature of a unilateral contract lies in its one-sided nature, which is why it is the correct answer in this scenario.