The buyer and seller execute an amendment extending the option period by 5 days. However, the amendment does not specify any additional option fee. Is the extension valid?
Correct Answer
A) Yes, an amendment is a binding agreement between the parties regardless of additional consideration
An amendment is a binding agreement between the parties. While additional option fee may be negotiated as part of the extension, it is not legally required for the amendment to be valid. The mutual agreement of the parties provides sufficient consideration.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Offer and acceptance is the process by which one party proposes specific terms for a contract and the other party agrees to those exact terms, creating mutual assent. This mutual agreement, also called a meeting of the minds, is an essential element of every valid contract.
An option contract gives one party the exclusive right, but not the obligation, to purchase or lease a property at a specified price within a specified time period. The buyer pays option consideration to keep the option open.
A purchase agreement is a legally binding contract between a buyer and seller that outlines the terms and conditions for the sale of real property. It is also commonly called a sales contract, purchase and sale agreement, or earnest money agreement.
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