ContractsIntermediateArizona Exam

An Arizona lease that includes a 'lease with option to purchase' gives the tenant:

AA binding obligation to purchase the property at the end of the lease term unless the tenant provides 60 days' written notice of intent not to exercise the option
BThe right (but not obligation) to purchase the property at a specified price within a specified timeCorrect
CAutomatic conversion to ownership at lease expiration, with accumulated rent payments credited in full toward the purchase price of the property
DA right of first refusal that gives the tenant 30 days to match any third-party offer the landlord receives before the landlord can sell to the outside buyer

Why The right (but not obligation) to purchase the property at a specified price within a specified time Is Correct

Answer B: The right (but not obligation) to purchase the property at a specified price within a specified time

A lease-option gives the tenant the right (but not obligation) to purchase the property at an agreed price within the option period. The tenant pays option consideration, which may credit toward the purchase price.

Exam Tip: Contracts

Contract questions frequently test the essential elements required for a valid contract. Remember: competent parties, mutual consent, lawful object, and sufficient consideration. Watch for void vs. voidable distinctions.

Key Contracts Terms in This Question

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