Contracts
An 'option contract' in real estate gives the buyer:
AThe obligation to purchase the property
BThe right but not the obligation to purchase at a set price within a set time✓ Correct
CThe right to list the property for sale
DAn automatic first right of refusal on all future sales
Explanation
An option contract gives the buyer (optionee) the right — but not the obligation — to purchase a property at a predetermined price within a specified time period, in exchange for option consideration paid to the seller.
Related California Contracts Questions
- A contract entered into by a minor is generally:
- A buyer makes an offer on a home and the seller counters with a higher price. The buyer then submits a new offer at the seller's counter price. At this point, what is the legal status of the original offer?
- Which of the following is NOT a required element of a valid contract?
- Which element is NOT required for a valid real estate contract in California?
- What is liquidated damages in a California residential purchase agreement?
- A liquidated damages clause in a California residential purchase agreement limits the seller's damages, if the buyer defaults, to:
- What is the parol evidence rule?
- What does it mean for a contract to be 'void' versus 'voidable'?
Practice More California Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free California Quiz →