Options Law and Legal Definition
An option is a contract to purchase the right for a certain time, by election, to purchase property at a stated price. An option may be a right to purchase property or require another to perform upon agreed-upon terms. By purchasing an option, a person is paying for the opportunity to elect or "exercise" the right for the property to be purchased or the performance of the other party to be required. "Exercise" of an option normally requires notice and payment of the contract price. The option will state when it must be exercised, and if not exercised within that time, it expires. If the option is not exercised, the amount paid for the option is not refundable. Sometimes an option is the right to renew a contract, such as a lease, broadcasting a television series, the employment of an actor or athlete, or some other existing business relationship. A "lease-option" contract provides for a lease of property with the right to purchase the property during or upon expiration of the lease.
The following is an example of a federal statute defining the term,'option':
The term "option" means "an agreement, contract, or transaction that is of the character of, or is commonly known to the trade as, an "option", "privilege", "indemnity", "bid", "offer", "put", "call", "advance guaranty", or "decline guaranty". (7 USCS § 1a)
Relevant legal forms include:
Stock Option and Award Plan
Option to Purchase Stock
Option to Purchase Stock
Option of Remaining Partners to Purchase
Option to Purchase - Residential
Option to Purchase - Short Form
Option to Purchase - Residential
Option to Purchase - Short Form
Residential Lease Agreement and Option to Purchase - Detailed
Lease with Option to Purchase
Option to Purchase Addendum to Residential Lease
Notice to Lessor Exercising Option to Purchase
Residential Lease Agreement with Option to Purchase
Notice of Option for Recording
