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 for the replotting, which would be a time-consuming process. If Roberts buys a 60-day option from the seller of the properties for $4000, which of the following would be 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 $4000 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 or to revoke the offer within the option period.

Question

Quizplus · Accepted Answer

An option contract, such as the one described, gives the buyer (Roberts) the exclusive right to buy the property at a set price within a specified period (60 days in this case), without obligating the buyer to make the purchase. The seller is bound by the contract not to sell the property to anyone else or revoke the offer during this period.

Roberts Has the Chance to Buy Three Adjacent City Lots