Which four elements are typically required for an option contract?

• A. In writing; price & terms; length of time; legal description
• B. In writing; price & terms; length of time; consideration
• C. In writing; price; length of time; option money
• D. In writing; price & terms; legal description; consideration

Answer: (B)

An option contract gives the buyer the exclusive right to purchase within a set period in exchange for something of value. Four elements are typically required to make it enforceable: it must be in writing (real estate deals fall under the statute of frauds), it must state the price and terms or provide a clear method to determine them, it must specify how long the option lasts, and it must be supported by consideration (something of value given for keeping the option open, often option money). The writing requirement prevents enforceable oral land deals, the price and terms ensure there’s a definite deal rather than a vague offer, the time frame sets the window to exercise, and consideration gives the option contract its binding character. A legal description isn’t one of the four core requirements, though the contract should clearly identify the property.