An option contract is a type of contract that requires the offeror to hold open an offer for a certain period of time, during which the offeree can decide whether or not to accept the offer. The key feature of an option contract is that it removes the possibility of revocation through death or insanity of the offeror, which makes it a powerful tool for securing an offer in situations where there is a risk of the offeror's incapacity or death.

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An Option Contract

Question 40

Multiple Choice

An option contract:

A) removes the possibility of revocation through death or insanity of the offeror.
B) is valid only if in return for the agreement to hold the offer open,the offeror receives no money or something else of value from the offeree.
C) is a contract that permits a party to lease real property while at the same time holding an option to purchase that property.
D) is an agreement that binds an offeror to a promise to hold open an offer with no time limit specified.

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