Option contract

An option contract, or simply option, is defined as 'a promise which meets the requirements for the formation of a contract and limits the promisor's power to revoke an offer.' An option contract, or simply option, is defined as 'a promise which meets the requirements for the formation of a contract and limits the promisor's power to revoke an offer.' An option contract is a type of contract that protects an offeree from an offeror's ability to revoke their offer to engage in a contract. Consideration for the option contract is still required as it is still a form of contract, cf. Restatement (Second) of Contracts § 87(1). Typically, an offeree can provide consideration for the option contract by paying money for the contract or by providing value in some other form such as by rendering other performance or forbearance. See consideration for more information. An option is the right to convey a piece of property. The person granting the option is called the optionor (or more usually, the grantor) and the person who has the benefit of the option is called the optionee (or more usually, the beneficiary).