Contracts, 12% of the examination
Option
A unilateral contract giving the holder the right, but not the obligation, to buy on stated terms during a stated period.
The optionor is bound to keep the offer open while the optionee remains free to exercise or let it expire. An enforceable option requires consideration, definite terms, and, when it concerns a transfer of real property, a writing that satisfies the statute of frauds. Exercise must comply with the option's time and manner requirements. A right of first refusal is different because it is triggered only after the owner decides to sell on terms the holder may be allowed to match.
Test the distinction
A relevant question from Contracts, selected because its facts or explanation use this concept.
What distinguishes an option from a right of first refusal?
Written to DRE's published topic list. Not a real examination question, since reproducing those is a misdemeanor under B&P Code section 123.
Primary sources
Use these authorities when a course summary, forum answer, or older flashcard conflicts with the current California rule.