Question

Roger wanted to buy a farm from

his neighbor, John, who was
considering putting it for sale.
Roger told John that he would pay
$350,000 for the farm if he could
put down $10,000 now and John
keeps the offer open to Roger for 6
months. What type of agreement is
this?
Choose one of the following:
a. Lease agreement
b. Option agreement
c. Purchase contract
d. Right of pre-emption

Answer 1

The type of agreement described is an Option agreement in which Roger has the right, but not the obligation, to buy the farm within 6 months.

Step-by-step explanation:

The type of agreement described in the question is a Option agreement. An option agreement is a contract that allows one party (in this case, Roger) the right, but not the obligation, to buy a property (the farm) at a specified price within a certain time frame (6 months). In this agreement, Roger offers $350,000 for the farm and puts down $10,000 as an upfront payment. John agrees to keep the offer open to Roger for 6 months, giving him the option to purchase the farm at the agreed price.

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