An option contract is classified as what type of contract?

An option contract is classified as a unilateral contract because only one party is obligated to perform according to the terms of the agreement. In the context of real estate, for instance, an option contract allows a buyer the right to purchase a property at a specified price within a certain time frame, while the seller is bound to sell the property if the buyer decides to exercise their option.

This means that the seller has a commitment to the buyer, but the buyer has the option to decide whether or not to proceed with the purchase, thus creating the unilateral nature of this contract. The buyer's right to buy is unconditional, but the seller's obligation comes into play only if the buyer chooses to exercise that right within the agreed period.

The other types of contracts listed, such as bilateral, conditional, and implied contracts, involve different obligations from both parties. A bilateral contract requires both parties to make promises to each other, whereas a conditional contract depends on fulfilling certain conditions before any obligation arises. An implied contract is one that is not explicitly stated but can be inferred from actions or circumstances. These distinctions help to clarify why the option contract is distinctly classified as unilateral.