Roberts has the chance to buy three adjacent city lots zoned "duplex." The most profitable return would be the building of four townhouses across the three lots,but that would necessitate getting permission from the city,and that procedure takes time.If Roberts buys a 60-day option from the seller of the properties for $400,which of the following is true?
A) The offer for the properties will expire before the end of the designated 60-day period, if another person offers a higher price.
B) If Roberts does not exercise the option during the option period, she can later force the seller to sell that property to her at that price.
C) By buying the option, Roberts has bought a period of time during which she must accept the land offer.
D) If Roberts does not exercise the option, she will get her $400 back because she didn't get what she was bargaining for.
E) The seller is bound by contract neither to sell the property to any other party nor to revoke the offer within the option period.

Question

Quizplus · Accepted Answer

Buying the option gives Roberts the right, but not the obligation, to buy the properties at a specified price within a specified time period. The seller is bound by contract not to sell the properties to anyone else or revoke the offer within the option period. However, if Roberts chooses not to exercise the option, she forfeits the $400 option fee, and the seller can then sell the properties to someone else. Therefore, option E is the most accurate statement.

Roberts Has the Chance to Buy Three Adjacent City Lots