Contracts
Which of the following BEST describes an option contract in real estate?
AA contract requiring the buyer to purchase and the seller to sell at a set price
BA unilateral contract giving the buyer the right, but not the obligation, to purchase within a set time for a fee✓ Correct
CA bilateral agreement between two buyers competing for the same property
DA lease agreement with an automatic purchase provision
Explanation
An option contract is a unilateral contract in which the optionee (buyer) pays consideration for the exclusive right to purchase a property within a specified time at a predetermined price. The seller is obligated to sell if the buyer exercises the option, but the buyer is not obligated to buy.
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