Osborn's A Concise Law Dictionary defines that "a right conferred by agreement to buy or not at will, any property within a certain time".
Consideration must be given in order to validate an Option as a contract. For example, "In consideration of RM10, I hereby give an option to so and so to buy or sell the property described in the schedule hereto upon the terms and conditions herein stated".
It is advisable to attach a draft of Sale and Purchase Agreement to the Option. For example, "The Vendor hereby gives an option to the option holder Ali Bin Adam of No. 222, Jalan Indah, Bangi, Selangor to buy the said property upon the terms and conditions stipulated in the specimen sale and Purchase Agreement annexed hereto"
Option money should form part of the purchase price.
What are basic terms of the option?
Basic terms of the option are:-
# terms of payment
# particulars of the property
# where and when to pay the 10% deposit
- specifying the time to pay the deposit
eg. by 9.am. , 19September 2009, in the office of Umi Afiat & Co.