An option is a contract in which the owner gives a prospective purchaser the future right to buy the property at a fixed price within a specific period. What type of contract is this?

• A. Unilateral Contract
• B. Bilateral Contract
• C. Void Contract
• D. Implied Contract

Answer: (A)

An option grant is a unilateral contract because only one party makes a promise that creates an obligation if the other party performs. In this setup, the owner promises to keep the property available to sell at a fixed price for a set period, in exchange for the buyer paying an option fee. The buyer doesn’t promise to buy now; they gain the right to purchase later by exercising the option. The seller’s promise to sell if the option is exercised becomes binding when the option is exercised, but the buyer’s promise to buy isn’t incurred until that point. That one-sided promise structure is the hallmark of a unilateral contract. It’s not a bilateral contract, which would require mutual promises to perform; it isn’t void or invalid, and it isn’t implied because the terms are explicit and arise from the grant of the option rather than from conduct.