An option contract, or simply option, is defined as "a promise which meets the requirements for the formation of a contract and limits the promisor's power to revoke an offer." Restatement (Second) of Contracts ยง 25 (1981).
An option contract is a type of contract that protects an offeree from an offeror's ability to revoke the contract.
Consideration for the option contract is still required as it is still a form of contract. Typically, an offeree can provide consideration for the option contract by paying money for the contract or by providing value in some other form such as by rendering other performance or forbearance. See consideration for more information.
Read more about Option Contract: Introduction, Application of Option Contract in Unilateral Contracts, Assignability
Famous quotes containing the words option and/or contract:
“Our passional nature not only lawfully may, but must, decide an option between propositions, whenever it is a genuine option that cannot by its nature be decided on intellectual grounds; for to say, under such circumstances, “Do not decide, but leave the question open,” is itself a passional decision—just like deciding yes or no—and is attended with the same risk of losing the truth.”
—William James (1842–1910)
“The way in which men cling to old institutions after the life has departed out of them, and out of themselves, reminds me of those monkeys which cling by their tails—aye, whose tails contract about the limbs, even the dead limbs, of the forest, and they hang suspended beyond the hunter’s reach long after they are dead. It is of no use to argue with such men. They have not an apprehensive intellect, but merely, as it were a prehensile tail.”
—Henry David Thoreau (1817–1862)