Question

If an offeree gives the offeror something of value to keep an offer open, the contract thereby created is called a(n).

A) Executory contract.
B) Option contract.
C) Implied contract.
D) Voidable contract.

Answer 1

An option contract is created when an offeree gives the offeror something of value to keep an offer open.

Step-by-step explanation:

The correct answer to this question is Option B) Option contract.

An option contract is created when an offeree gives the offeror something of value to keep an offer open. In an option contract, the offeror is obligated to keep the offer open for a specified period of time, during which the offeree has the option to accept the offer.

For example, let's say an individual offers to sell their car to someone for $10,000. The potential buyer wants to think it over and is willing to pay the seller $500 to keep the offer open for one week. In this scenario, the contract created is an option contract. The seller is obligated to keep the offer open for one week, and the buyer has the option to accept or reject the offer within that timeframe.