James offers to sell four acres of land to Jennifer for $8,000 and further offers to keep the offer open for one month if Jennifer will pay him $100 for the privilege.Jennifer pays James $100.Which statement describes the payment of $100?

Question

Quizplus · Accepted Answer

Jennifer's payment of $100 constitutes an option contract, where James has given Jennifer the option to purchase the land in one month for $8,000. Jennifer has paid for the privilege of having the option to purchase the land within that time frame.

James Offers to Sell Four Acres of Land to Jennifer