Which of the following is NOT a characteristic of a unilateral contract?

A unilateral contract is defined by the nature of the agreement where only one party makes a promise that is contingent upon the other party's performance. In this context, the characteristic that "both parties must perform their promises" does not apply because, in a unilateral contract, only one party is obligated to fulfill a promise upon the other party's action or performance.

For example, a simple unilateral contract would be a scenario where someone offers a reward for the return of a lost pet. The person offering the reward is the only one who has made a promise (to pay the reward), while the other party (who finds the pet) is not obligated to perform any action but has the option to do so in order to receive the reward.

Therefore, in a unilateral contract, the focus is on the obligation of the party making the promise, and this is what distinguishes it from bilateral contracts, where both parties have mutual obligations to perform. This understanding clarifies that the correct answer is centered around the unique nature of unilateral contracts, highlighting that obligations are not shared in this type of agreement.