When it comes to contracts, many people believe that both parties must sign on the dotted line to make the agreement legally binding. However, this is not always the case. It is possible for a contract to be signed by only one party, though the circumstances in which this is permissible are limited.
A unilateral contract is an agreement made by one party in which the other party accepts by performing the specified task or action. For example, if you offer a reward for finding a lost item, anyone who finds that item and fulfills the agreed-upon terms can accept the offer by completing the task. In this case, the offeror has made a binding contract with anyone who performs the specified task, even though only one party has actually signed the contract.
Another instance where a contract may be signed by only one party is when a power of attorney is involved. A power of attorney is a legal document that allows an individual (the “principal”) to authorize another person (the “agent” or “attorney-in-fact”) to act on their behalf in a legal or financial capacity. If the principal is incapacitated, the agent may be authorized to sign contracts on their behalf.
In some cases, a contract may also be deemed valid if the parties have reached a verbal agreement and indicated their acceptance. This is known as an oral contract, which can be as legally binding as a written contract in certain situations, particularly in states where oral agreements are recognized.
However, relying solely on verbal agreements is risky, as it can be difficult to prove the terms of the agreement in court if there is a dispute. For this reason, it is always recommended to have a written contract signed by both parties whenever possible.
In conclusion, while a contract can be signed by only one party in certain circumstances, it is generally not advisable. Creating a written agreement signed by both parties clearly outlines the terms of the contract and can help avoid misunderstandings and disputes down the line.