Mrs. Clements gave the University of Iowa a written option on a piece of property she owned. The University paid $300 to keep the option open from January 3, 1982 until April 3, 2010. On February 15, 2010, Mrs. Clements notified the University in writing that she was revoking her offer. Mrs. Clements then sold the property to Douglas (a good faith purchaser who knew nothing about the option).

Question

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The University is entitled to damages because they had a valid option contract with Mrs. Clements, which she breached by selling the property to someone else before the option period expired. An option contract, once paid for, cannot be revoked by the offeror (Mrs. Clements) until the time period agreed upon has expired.

Mrs Clements Gave the University of Iowa a Written Option