When the offerer has allowed the offeree a certain period to accept, the offer may be withdrawn at any time before acceptance by communicating such withdrawal, except when the option is founded upon a consideration, as something paid or promised. (n)
Kapag ang nag-aalok ay nagbigay ng palugit na panahon sa kanyang inaalok upang tanggapin ito, ang pag-aalok ay maaari na niyang kanselahin sa oras na lumipas na ito, maliban kung ang bagay na inialok bilang konsiderasyon ay ipinalalagay na kabayaran o kumpromiso.
Discussion:
The article applies only to a situation where the offeror has allowed the offeree “a certain period of time to accept”. This is giving the offeree the option to accept or not to accept within a fixed period of time.
The time of acceptance will depend on the circumstances:
If a period is fixed by the offeror;
If no period is fixed by the offeror.
Option contract, concept. It is a contract between the offeror and the offeree whereby the former grants the latter, for a valuable consideration, the privilege to buy or not to buy certain objects at anytime within the specified period and for a fixed price.
The option contract or contract of option is separate and distinct from the principal contract which the parties may enter into later if they finally conclude their main agreement. It is therefore a preparatory contract to the principal contract should the parties, finally consummate their transaction which is under negotiation. The matter is said to be still under negotiation because the offeror may or not take advantage of the privilege granted him.
Option money and earnest money
Option money – is the consideration paid in an option contract. If the principal contract is not consummated, the option money is not refunded
Earnest money is the payment made to the seller by the buyer to show his good faith. It will constitute as part of the purchase price, if the sale is finally consummated. It is also a proof of the perfection of the contract. If the sale is not concluded, the earnest money shall be returned to the would be buyer unless there is a contrary agreement.
What is an option contract?
It is a contract between the offeror and the offeree whereby the former grants the latter, for a valuable consideration, the privilege to buy or not to buy certain objects at anytime within the specified period and for a fixed price.
The option contract or contract of option is separate and distinct from the principal contract which the parties may enter into later if they finally conclude their main agreement. It is therefore a preparatory contract to the principal contract should the parties, finally consummate their transaction which is under negotiation. The matter is said to be still under negotiation because the offeror may or not take the advantage of the privilege granted him.