Unilateral Contract


An option contract is a unilateral contract, meaning only one party is legally required to perform. In an option contract, the property owner (the optionor) must sell the property if the buyer (the optionee) chooses to exercise the option. However, the optionee is not required to buy the property. The optionee has a choice—this is a right, not an obligation. If the optionee decides to move forward, they simply notify the optionor in writing that they are exercising the option. At that point, the option contract turns into a regular purchase and sale contract, which is a bilateral contract where both parties are obligated to perform.Consideration (Option Fee). The optionee pays a fee to the optionor for the right to buy the property at a set price within a certain time. This fee is called consideration. If the optionee buys the property, the fee may be credited toward the purchase price. If the optionee does not buy the property, the optionor keeps the fee.