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A Guide to the Best Practices for Contract Administration Getting all your ducks in a row for a major purchase can be tricky. A vendor wants to strike a deal, but you don't have a store to sell from yet. A property owner wants to sell you land ASAP, but you don't have financing. Offer option these situations, a contract giving you the option to buy may be safer than a firm offer that commits you to the purchase.
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Share on Facebook An option contract is an agreement that fills the necessary requirements for establishing a contract and limits the promiser's ability to rescind an offer. A firm offer occurs when a buyer makes an irrevocable offer to offer option seller. The primary difference is that an option contract entitles the buyer to the option to purchase the items at a later time, whereas a firm offer gives the buyer the right to buy the items outright at any time. Firm Offer Defined A firm offer is a written offer that cannot be retracted or revised for a specific time period.
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Introduction[ edit ] An option is the right to convey a piece of property. The person granting the option is called the optionor  or more usually, the grantor and the person who has the benefit of the option is called the optionee or offer option usually, the beneficiary. Because options amount to dispositions of future property, in common law countries they are normally subject to the rule against perpetuities and must be exercised within the time limits prescribed by law. In relation to certain types of asset principally landin many countries an option must be registered in order to be binding on a third party.
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