Option Contracts Flashcards
1
Q
What is an “option”?
A
An option is an agreement between a buyer and seller or tenant and landlord.
2
Q
What is a bilateral contract?
A
A contract where both parties have duties to perform.
3
Q
What is a unilateral contract?
A
A contract where only one party is obligated to perform. A unilateral contract is said to lack mutuality.
4
Q
What’s an example of an option between a buyer and a seller?
A
A seller gives the buyer the option to purchase a piece of property within the next year at a price of $150,000 cash. The buyer has the option, at any point in that year, to purchase the property, but is NOT obligated to.
5
Q
Is the buyer obligated to purchase under an option?
A
No
