Also known as: options to purchase real property · option to purchase · purchase option · real estate option · property purchase option
Written by attorneys · grounded in primary & secondary sources — see below
A contract granting the holder the right to buy specified real property at a predetermined price within a stated period. Separate consideration renders the offer irrevocable for the option term. The duration is a reasonable time when no term is stated.
Oakley Osei sent Otto Osman a signed letter expressing interest in leasing a parcel and granting an option to purchase. After negotiations the parties signed a second memorandum that omitted the land description but referenced the option price. The two documents together satisfied the statute of frauds and bound Osei to honor the option.
Olympia Steel's board approved a financing package that included an option allowing Olympus Banking to purchase a warehouse parcel at a fixed price if the loan was not repaid. The corporation possessed statutory power to grant the real-property option as part of its authority to secure obligations.
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Oriana Oberman granted Olivia Owens an option to purchase a lakeside lot without specifying any time limit. Owens attempted to exercise the option eight years later. The court held that the option lasted only a reasonable time and had already expired.
Orion Orlov paid consideration for a ninety-day option to purchase Oliver Okeke's commercial building. Okeke died forty days later. Orlov tendered the purchase price to the estate within the remaining period. The option contract remained enforceable against the estate.
Oasis Resorts' board granted a major shareholder an option to purchase undeveloped resort land at a below-market price. Minority shareholders challenged the grant as unfair. The court examined whether the directors had fulfilled their fiduciary duties in approving the option.
Onyx Pharmaceuticals received an option to purchase a key patent portfolio from a target company during a hostile bid. The option was structured to close only upon a change of control. The bidder exercised the option after acquiring sufficient shares, triggering the purchase obligation.
An option contract supported by consideration keeps the power of acceptance alive even after the offeror's death. The estate stands in the same position as the decedent and must honor a timely exercise. Ordinary revocation or death rules do not apply to paid options.
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Acceptance under an option contract is effective only upon receipt by the offeror or an authorized agent at the designated place. Mailing alone does not suffice. The receipt rule protects the offeror by fixing the exact moment the option is exercised.
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A counter-offer or rejection does not terminate the power of acceptance under an option contract. The rule protects the paid-for right to decide during the full option period. Only discharge of the underlying contractual duty ends the option.
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…After years of rental use, however, the building had fallen into disrepair, and could no longer be rented out. The Nollans' option to purchase was conditioned on their promise to demolish the bungalow and replace it. In order to do so, under Cal. Pub. Res. Code Ann. §§ 30106, 30212, and 30600 (West 1986), they were required to…