In a unilateral contract, who is legally bound to the obligations after the premium is paid?

In a unilateral contract, the key characteristic is that only one party makes a promise that is legally enforceable. In the context of an insurance policy, after the premium is paid, the insurer is the party that is legally bound to uphold the provisions of the contract. This means that once the insured pays the premium, the insurer must provide coverage as outlined in the policy.

The contract is initiated by the insured's payment of a premium, which is considered an act of consideration, but the insurer is the only one that is obligated to perform under the contract, which typically includes paying claims for covered losses. This distinction is crucial in understanding the nature of unilateral contracts, especially in the insurance field, as it emphasizes the insurer's obligation to fulfill their promise after the contract is in effect.

On the other hand, the insured does not have a corresponding obligation to perform (beyond paying premiums), making this type of contract distinct from bilateral contracts where both parties have obligations.