Explanations

An option is a type of contract that grants a party the right, but not the obligation, to lease or purchase a property under specified terms within a defined period. Like all valid contracts, an option requires consideration to be legally binding. Consideration is something of value exchanged between parties to induce them to enter into a contract.

While consideration is essential, the law does not require a high amount for an option to be valid; a very small amount, such as “5 cents,” can be sufficient as long as it is actual consideration. Therefore, an option is valid if consideration, no matter how minimal, has been delivered or provided.

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