Under an option contract, who is obligated to proceed with the sale upon exercise of the option?

• A. The optionor
• B. The optionee
• C. The broker
• D. The seller

Answer: (A)

An option contract gives the buyer (the optionee) the exclusive right to buy or sell within a set period, but keeps the obligation to perform on the party who grants the option. The key idea is that the optionee isn’t required to act; they may choose to exercise the option. If they do exercise, the party who granted the option (the optionor) is obligated to proceed with the sale under the terms already agreed (price, property, timeframe). The broker’s role is to facilitate, not to carry the obligation, and the seller isn’t bound to sell unless they are the optionor. So, once the option is exercised, the obligation to complete the sale lies with the optionor.