Option (law)

This article is about options as a legal concept. For other uses of options, see Option (disambiguation).

Property law
Part of the common law series
Acquisition
Gift · Adverse possession · Deed Conquest · Discovery · Accession Lost, mislaid, and abandoned property Treasure trove  · Bailment · License Alienation
Estates in land
Allodial title · Fee simple · Fee tail Life estate · Defeasible estate Future interest · Concurrent estate Leasehold estate · Condominiums Real estate
Conveyancing
Bona fide purchaser Torrens title · Strata title Estoppel by deed · Quitclaim deed Mortgage · Equitable conversion Action to quiet title · Escheat
Future use control
Restraint on alienation Rule against perpetuities Rule in Shelley's Case Doctrine of worthier title
Nonpossessory interest
Easement · Profit Covenant Equitable servitude
Related topics
Fixtures · Waste · Partition Riparian water rights Prior-appropriation water rights Lateral and subjacent support Assignment · Nemo dat Property and conflict of laws · Blackacre
Other common law areas
Contract law · Tort law Wills, trusts and estates Criminal law · Evidence
v · d · e

In law, an option is the right to convey a piece of property. The person granting the option is called the optionor (or more usually, the grantor) and the person who has the benefit of the option is called the optionee (or more usually, the beneficiary).

Options characteristically exist in one of two forms:

• Call options, which give the beneficiary the right to require the grantor to sell or convey the property to them at the agreed price on exercise
• Put options, which give the beneficiary the right to require the grantor to buy or receive the property at the agreed price on exercise.

Because options amount to dispositions of future property, in common law countries they are normally subject to the rule against perpetuities and must be exercised within the time limits prescribed by law.

In relation to certain types of asset (principally land), in many countries an option must be registered in order to be binding on a third party.

See also

• Option (finance)
• Option contract