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27 April, 08:20

Baird (optionor) gave Dole (optionee) an option to buy a piece of property for 6 months for $300,000. Dole gave Baird $150 for the option. Was this a valid option?

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  1. 27 April, 08:23
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    Yes, it is a valid option.

    Explanation:

    In order for a purchase option to be valid, it must include valuable consideration, the price must be set and there must be a specific time period during which the option is valid.

    In this case, this option met the 3 requirements:

    the $150 is a valuable consideration, even though the amount is very low, it was agreed between the two parties the price was set at $300,000 the time period is 6 months
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