ContractsOption_contracts_and_right_of_first_refusalEASY
A developer pays a landowner $5,000 for the right to purchase a vacant lot at $200,000 within 12 months. If the developer decides not to buy, what happens to the $5,000?
Correct Answer
B) It is retained by the landowner as the option consideration
In an option contract, the option fee is typically nonrefundable consideration paid for the right to buy. If the developer does not exercise the option, the landowner keeps the fee.
Answer Options
A
It is refunded to the developerB
It is retained by the landowner as the option considerationC
It is applied to the purchase priceD
It is deposited into escrow for future useWhy This Is the Correct Answer
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Why the Other Options Are Wrong
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Deep Analysis of This Contracts Question
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Background Knowledge for Contracts
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Real World Application in Contracts
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Related Topics & Key Terms
Key Terms:
option_contracts_and_right_of_first_refusalcontractsoption_feenonrefundable
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