Precisely what is an option? “An possibility is a contract by which the proprietor of property invests one more with all the unique ideal to get reported assets at a stipulated sum in a confined or acceptable time inside the upcoming.” Nattress & Associates v. Cidco (1986) 184 Cal.App.3d 55, 66. Donald Trump used an alternative to invest in the Hotel Commodore at Grand Central Terminal, his ground breaking first deal at 27 years old. More commonly, options are used in leases in which the landlord gives the tenant a choice to buy the assets real estate litigation los angeles.
For example, the AIR Possibility to purchase form provides that the lessee must provide written notice in just a certain time period (i.e., April 1, 2004 to April 30, 2006), while using the option expiring at the end of the option period. The form also sets forth the price, the escrow agent, a time period in which to close the sale and other instructions. After exercising an option, the parties should then enter into a Invest in & Sale Agreement, which addresses in more detail all of the minutiae of the sale transaction.
An option is Irrevocable. A choice supported by consideration (even $1) is undoubtedly an irrevocable offer, open for a prescribed period. The acceptance must be in accordance using the terms of the choice agreement and must be free of conditions which the optionor is not bound to perform. Riverside Fence Co. v. Novak (1969) 273 Cal.App.2d 656, 660. The exercise of a choice is merely the communicated election of the optionee to accept the possibility. Id. at 661. It is important to recognize that, in terms of the formation of a agreement, a possibility is often a contract. Therefore, the “offer” (option) is truly irrevocable and merely awaits acceptance.
A Qualified or Conditional Acceptance. Precisely what is the effect of an acceptance which adds additional terms or is made conditional? “Any tender of performance is ineffective if it imposes conditions upon its acceptance which the offeror is not entitled to demand.” Riverside Fence Co., supra., at 662. However, the fact that a purported acceptance adds a qualification to the agreed-upon solution does not in and of itself terminate the alternative. As long as the solution period has not yet expired, a party may still exercise the selection without qualification or condition (even though a prior [ineffective] acceptance may have added such qualifications). Again, the possibility is truly irrevocable.
The courts have explained that “if the person offering to perform is acting in good faith, and makes the mistake of demanding something to which he is not entitled, he ought to be given the same opportunity to recede from such demand that he is allowed for tendering the correct amount where he has tendered too little, or the ideal thing where he has tendered the wrong thing…” Nattress & Associates, supra., at 67.