Explanations

A. Optionee has given adequate consideration: This statement is true. Consideration for an option contract can be as little as five cents. The $200 paid by the optionee is more than sufficient to constitute adequate consideration.

B. Optionee has created a legal interest in the property: This statement is false. During the option period, the optionee (buyer) does not have the right of use or possession of the property. An option grants a right to purchase, but it does not convey ownership interests or possessory rights in the property itself. The optionee holds a contractual right to decide whether to purchase, but not an actual legal title or immediate ownership interest in the real property.

C. Optionor’s temporary surrender of right to sell is “valuable” consideration: This statement is true. In exchange for the consideration, the optionor (seller) is obligated to “hold the option open” and cannot sell the property to any other buyer during the designated period. This restriction on the optionor’s ability to sell to others is a valuable part of the agreement for the optionee.

D. The agreement imposes no obligation on the optionee to purchase the property: This statement is true. An option grants a “right without the obligation” to lease or purchase a property. The optionee has “no legal responsibility to actually complete the purchase of the property at the end of the term”.

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