Which of the following best describes an aleatory contract?

An aleatory contract is best characterized by the concept that one party has greater risks than the other. This type of contract involves an exchange where one party's obligation to perform depends on the occurrence of a certain event, which is uncertain or unpredictable. In the context of insurance, for example, the insurer takes on the risk of loss and provides coverage, but the insured pays a premium even if no loss occurs. The essence of an aleatory contract lies in the unequal exchange; one party (the insurer) potentially stands to lose a significant amount while the other (the insured) may receive benefits only under certain conditions.

In contrast, options that suggest equal contributions or mutual obligations do not reflect the inherent uncertainty and potential asymmetry of risk that defines aleatory contracts. A legally binding nature, while applicable to aleatory contracts, is not exclusive to them and does not capture the unique characteristic of risk involved.