Question

Seller Brittany has agreed to a contract term that allows the buyer to purchase her property within two months at an agreed upon price. Which contract feature has Brittany agreed to?

A. Habendum clauseB. The right of first refusalC. An optionD. These types of agreements are unenforceable in the state of Texas

Answer 1

Answer: C - An option

Explanation: An Option Contract is an agreement between a seller and a buyer with an option to buy at a specified future date and at an greed price. Option contacts are majorly used in securities purchase, real estate purchase and commodity purchase.

An option contact is mostly used by traders as it gives them the opportunity to hedge their stock positions.

There are different types of option contacts and they are: stock option, commodity options, bond and interest rate options amongst others.