Options contracts play an important role in real estate transactions. There is usually a period between when an owner agrees to sell a property and the buyer can have the property inspected and arranged for financing. With an option contract, the seller knows the price he receives and receives a down payment, while the buyer knows that the price will not change. If the buyer cannot obtain financing or problems arise during the inspection, he may withdraw from the sale. For there to be a contract between two parties, there must be an offer and acceptance. An offer is the teaching of the fundamental conditions of the agreement. For an offer to be valid, it cannot be based on untruths. Acceptance of the offer means that the other party has accepted acceptance of the offer. For acceptance to be valid, it must be clear and cannot be based on conditional circumstances. Corporate offers and options contracts are the two types of offers. In Joppich`s case, Ms. Joppich purchased $65,000.00 of empty land from a residential subdivision of the developer. The serious money contract required the buyer to give the developer the opportunity to buy back the land if the buyer did not start building within 18 months of closing.
Upon conclusion, the buyer and developer signed an option agreement that stated in part: “Given the sum of $10 and $100 ($10.00) (“option tax”), paid in cash by the developer whose receipt and adequacy are recognized and confessed, the buyer grants the developer the exclusive right and option to acquire [the property].” The $10 was never paid. Ms. Joppich then filed a complaint to determine that the option contract was not applicable because the $10 had not been tendered or paid. The Supreme Court argued that the option of a treaty of law, known as “second” contracts, could be implemented and that an offer is binding as an option contract if it (a) is signed in writing and signed by the supplier, recommending an alleged consideration for the establishment of the offer and proposing an exchange on a fair terms within a reasonable time… ». The following example is found in the restatement: “A executes a written agreement “in the light of a dollar paid in hand” and delivers to B. a written agreement that gives the option to buy the described country belonging to ZuF for 15,000 USD, the option expires six days later at 12:00. The fact that the dollar is not being paid does not prevent the offer from being irrevocable. A commentator quoted by the Tribunal considers the restatement to be the position that “a bad recital of the nominal recital is sufficient to support the irrevocability of an offer as long as the underlying exchange is fair and the offer must be accepted within a reasonable time.” An option contract or simply an option is defined as “a promise that fulfills the requirements for contract formation and limits the promisor`s power to revoke an offer.”  It is a general principle of contract law that an offer cannot be ceded by the recipient of the offer to another party. However, an option contract may be sold (unless otherwise), allowing the option purchaser to put himself on the back of the original bidder and accept the offer to which the option relates.  A high degree of caution should be exercised in the development of a common law option contract and it is advisable to seek the assistance of a lawyer experienced in contract law.
They should always be written, because in their most fundamental form, they are the promise of a party to take an agreed action in the future, and over time, misunderstandings can end as initial conditions and intentions.