Option Agreement Definition
An option agreement is a contract between seller and buyer that allows the buyer the option to sell or buy the properties later at a specific date that is agreed. Usually, this contract is used in the real estate, commodity and securities transactions. If you want to learn how to write this agreement, you can adapt, learn and use the option agreement template.
How Does This Agreement Work?
In the financial transaction, you will find several types of an option agreement which are the following:
- The exchange-traded option – This agreement covers the commodity options, stock options, interest rate, index, rate and futures options.
- Over-the-counter option – This agreement is used between two parties which include the currency exchange rate options, interest rate options and also swaps.
Why Is Option Contract Important?
In business, the option contract allows the traders to hedge the stock position. In the real estate, this agreement enables the buyer to secure the deal before executing the purchase. You might want to learn the format from the lease option agreement template and book option agreement template.
In terms of finance, the option agreement is required. The parties are allowed to hold their service by paying some fee to the parties that are involved.
When learning this agreement, you might also need the memorandum of agreement templates. It will be easier for the other parties to know the content of the contract.
The excellent option agreement template helps you underline the responsibilities and rights of each party. In writing this agreement, you need to learn every detail should be included in the document. The payment details should be written. Besides, make sure you have checked the availability of the form in the real estate department under your local laws. Because this lease should contain important consideration, so you need to check every detail here.
What Is The Difference Between Option Agreement and The Conditional Contract?
Even though both of them look similar, there are some differences. Both parties cannot complete the agreement before the exercise the “option” in the document. The voluntary deal allows the purchaser doesn’t need to know the details of the planning permission. Meanwhile, the conditional contract includes the details all of the parties in case the purchaser needs this planning permission. However, the agreement will be unconditional when it is not used in the stipulated time stated in the document.
Why Should You Use Our Option Agreement Templates
We provide you templates for free with premium features. The professionals design the models, and it is designed for business and formal situation. Even you can easily edit the template whether you want to cut off specific details or add some more. You can easily customise the templates and reuse them whenever you want. Furthermore, the models are available in many formats. It is available in Word, Excel, PDF, Google Docs, Google Sheets and many more!