Final answer:
The contract where Sam pays a $500 option fee for the right to purchase a property is known as an option contract, which is considered a valid contract in legal terms. It is a binding agreement as long as it meets all the elements required by law, distinguishing it from voidable, void, or unenforceable contracts.
Step-by-step explanation:
When Sam, a prospective buyer, signs an option contract and pays the seller an option fee of $500, he is engaging in a type of agreement that gives him the exclusive right to purchase a property at a specified price within a set period of time. The term that best describes this contract would be D. Valid. Option contracts are legally binding agreements, provided they contain all the necessary elements of a contract, including offer, acceptance, intention to create legal relations, and consideration (which in this case is the $500 option fee). This type of contract is distinct from other forms of agreements under contract law such as voidable, void, or unenforceable contracts. Since Sam has entered into this agreement voluntarily and has provided consideration, the contract is considered valid unless there is evidence that it fails to meet other legal requirements.