Which of the following is a characteristic of a unilateral contract?

A unilateral contract is defined by the fact that only one party is obligated to perform under the terms of the agreement. In the context of insurance, this typically means that the insurer is the only party bound to fulfill the contract terms, such as paying a claim in exchange for the payment of premiums by the policyholder. The policyholder does not have any obligation to continue paying premiums; if they choose to stop making payments, the insurer's obligation to pay benefits ceases as well.

The other options reflect characteristics of different types of contracts. For instance, a bilateral contract obligates both parties to perform certain duties. Mutual consent is essential for all contracts, but it does not specifically describe a unilateral contract. As for penalties for non-performance, these are typically associated with legal agreements where consequences are defined for failing to fulfill obligations, but this concept does not uniquely identify unilateral contracts. In summary, the distinctive feature of a unilateral contract is the obligation resting solely on one party, confirming the correctness of the provided answer.