Can an option be e-signed?

Yes. Under the federal ESIGN Act (15 U.S.C. ch. 96) and state UETA statutes, electronic signatures are generally enforceable if intent, consent, attribution, and record retention are present.

Is notarization required?

Not usually for standard option agreements unless state law or recording requirements demand acknowledgment; deeds or recorded instruments commonly need notarization.

What if a party signs the wrong version?

Correct by executing an amendment or a replacement agreement signed by all parties. Preserve both versions and record the amendment showing contemporaneous intent to replace earlier terms.

How to prove signer identity?

Use multi-factor authentication, SMS codes, or knowledge-based authentication; retain audit logs capturing timestamps, IP addresses, and authentication events to support attribution.

Can I revoke an option?

Revocation depends on contract terms; unilateral revocation after grant is limited unless the agreement permits; follow the agreement’s amendment or termination provisions.

How should executed copies be stored?

Keep signed originals and secure electronic copies with audit trails and access controls. Retain per tax and regulatory guidance and your corporate records retention schedule.

Option Agreement Form

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

OPTION AGREEMENT

Parties and Effective Date

Grantor (Option Grantor) Grantor Address Optionee (Option Holder) Optionee Address

Effective Date:

Recitals

WHEREAS, Grantor is the lawful owner of the asset, property, right or business interest described as: (the "Subject"); and

WHEREAS, Optionee desires to obtain, and Grantor is willing to grant, an exclusive option to purchase or otherwise acquire the Subject on the terms and conditions set forth in this Agreement;

WHEREAS, the parties desire to reduce their agreement to writing and to set forth the rights, obligations and procedures applicable to the option and its exercise.

Grant of Option

Grantor hereby grants to Optionee an exclusive option (the "Option") to purchase or acquire the Subject upon the terms and conditions set forth in this Agreement. The Option is exercisable in whole or in part by Optionee during the Option Period defined below, subject to the conditions precedent set forth herein.

Scope of Work / Description of Rights

Scope of Work or Specific Rights Included in Option

Exercise Price and Payment Terms

Exercise Price:

Payment Schedule (describe timing, installments, and method) Late Payment Fee or Interest

All payments shall be made in United States dollars and shall be non-refundable except as expressly provided in this Agreement. Optionee's obligation to pay the Exercise Price is subject to Optionee's compliance with the conditions to closing set forth herein.

Term and Termination

Option Period Start Date: Option Period End Date:

Either party may terminate this Agreement for material breach by the other party if the breaching party fails to cure such breach within days after receipt of written notice. Termination shall not relieve either party of obligations accrued prior to termination.

Confidentiality

Each party acknowledges that, in connection with this Agreement and the Option, the other party may disclose certain confidential information. Each party agrees to: (a) hold confidential information in strict confidence; (b) use such information solely for purposes of performing under this Agreement; and (c) not disclose such information to any third party except to employees, agents or advisors on a need-to-know basis who are bound by confidentiality obligations no less protective than those contained herein. The confidentiality obligations shall survive termination for a period of years.

Representations and Warranties

Grantor represents and warrants that: (a) Grantor has good and marketable title to the Subject free of liens and encumbrances except as disclosed in writing to Optionee; (b) Grantor has full power and authority to enter into and perform this Agreement; and (c) there are no outstanding agreements or options that would materially impair the rights granted to Optionee hereunder.

Optionee represents and warrants that: (a) Optionee has the full power and authority to enter into this Agreement; and (b) the execution and performance of this Agreement will not violate any material agreement or law applicable to Optionee.

Notices

All notices required or permitted hereunder shall be in writing and delivered to the addresses set forth below or such other address as a party designates by written notice to the other party.

Grantor Notice Address Optionee Notice Address

Governing Law; Dispute Resolution

This Agreement shall be governed by and construed in accordance with the laws of the State of , without regard to conflict of laws principles. Any dispute arising out of or related to this Agreement shall be subject to the exclusive jurisdiction of the state and federal courts located in the county of the governing state.

Assignment; Successors

Neither party may assign its rights or delegate its obligations under this Agreement without the prior written consent of the other party, except that Optionee may assign the Option to an affiliate or to a purchaser of substantially all of its business provided that Optionee provides prior written notice to Grantor and remains liable for performance.

Entire Agreement; Amendment

This Agreement (including any schedules or exhibits expressly incorporated) constitutes the entire agreement between the parties with respect to the Option and supersedes all prior negotiations, understandings and agreements. This Agreement may be amended or modified only by a written instrument executed by both parties.

Severability

If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall remain in full force and effect and shall be construed so as to best effectuate the parties' intent.

Execution

This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Signatures delivered by electronic transmission shall be deemed original signatures for all purposes.

Grantor:

By:

Date:

Optionee:

By:

Date:

What an Option Agreement Form is and when it matters

An Option Agreement Form is a written contract that grants a party the right, but not the obligation, to buy or sell an asset, equity interest, or property at a specified price within a defined period. In corporate and startup contexts, the form documents grant date, vesting schedule, exercise price, number of options, and conditions for exercise or termination. For real estate or business sale contexts it preserves the offer terms while giving the holder time to decide. Properly completed, the form creates enforceable rights and clarifies tax and reporting responsibilities for all parties.

Why a clear Option Agreement Form protects parties and value

A precise Option Agreement reduces future disputes by fixing key terms — price, timing, and performance conditions — and it helps satisfy tax, securities, and corporate governance obligations in the United States.

Who commonly prepares and signs Option Agreement Forms

Option agreements are used by companies, investors, property sellers, and individual option holders in both private and commercial transactions.

Corporate founders and HR teams preparing equity grants or stock option plans for employees and contractors.
Investors and acquirers securing rights to buy business interests during due diligence or financing rounds.
Real estate owners and developers using land or purchase options to reserve property rights ahead of closing.

The form’s structure and required attachments differ by industry and whether equity, real estate, or business assets are the subject.

Typical signatories and their roles

Grantor — Officer

The grantor is usually a corporate officer, property owner, or authorized representative who legally conveys the option. That signer confirms authority to bind the issuing entity and should reference board approvals or delegations when relevant.

Grantee — Beneficiary

The grantee is the individual or entity receiving the option right. The grantee’s signature, taxpayer identification, and contact information are used for tax reporting, notices of exercise, and any future escrow or transfer steps.

Essential elements to include in a professional Option Agreement Form

A complete Option Agreement should be concise but include all elements needed to identify parties, financial terms, and procedural steps for exercising or disclaiming the option.

Grant description

Precise description of what the option covers (shares, units, property parcel, asset class) and any unique identifiers or exhibits.

Term and exercise window

Start date, expiration date, vesting schedule (if applicable), and any conditions that accelerate or delay the exercise period.

Price and payment terms

Exercise price, accepted payment methods, escrow requirements, and consequences of late or partial payment.

Transfer restrictions

Limits on assignment, right of first refusal, or conditions that permit or prohibit transfers before exercise.

Representations and warranties

Concise statements by each party about authority, title, compliance, and any required disclosures.

Remedies and governing law

Damages, injunctive relief, arbitration or venue selection, and the governing state law for interpretation.

Critical data fields to capture on the form

Parties: Full legal names

Effective date: MM/DD/YYYY

Option type: Equity, purchase, or property

Quantity: Shares, units, or acres

Exercise price: Currency amount

Vesting: Schedule or immediate

Step-by-step: completing and executing an Option Agreement Form

Follow this concise sequence to prepare the form, collect approvals, execute signatures, and preserve evidence of the transaction.

01

Draft terms: Describe asset, price, term, and conditions clearly.
02

Internal approvals: Obtain board or owner consent where corporate authority is required.
03

Signatures: Collect dated signatures from all parties and any witnesses or notary if required.
04

Record and distribute: Store originals and distribute executed copies to each party and tax advisor.

Typical digital workflow settings for an online Option Agreement

Configure these fields when preparing the form for electronic completion to ensure correct routing and enforceability.

Field	Configuration
Signature Field	Required; signer-specific; date stamp enabled
Initials Field	Optional; place at each page change
Conditional Vesting	Show vesting exhibit when employee role selected
Authentication	Email plus SMS code or stronger as needed

How e-signing and delivery typically flow for an Option Agreement

Electronic completion follows a predictable series of actions from upload through signature and archival. Design the flow to capture intent, identity, and an audit trail.

Upload document: Sender uploads the Option Agreement draft
Place fields: Sender assigns signature, date, and required data fields
Notify signers: Platform sends email or link to each signer
Capture audit trail: System logs timestamps, IPs, and authentication events

Technical considerations for submitting and signing electronically

Ensure the chosen platform supports required authentication, record retention, and export formats before sending an Option Agreement for signature.

File formats: PDF and DOCX supported
Integrations: Salesforce, NetSuite, Microsoft 365
Authentication: Email, SMS, or KBA options

Key dates and time-sensitive items to record on the form

Document and track these deadlines explicitly to avoid lapse of rights or unintended tax consequences.

Grant date:

Date when option becomes effective and starts any vesting period

Vesting milestones:

Dates when portions of the option become exercisable

Expiration date:

Final date to exercise the option rights

Exercise notice deadline:

Deadline for delivering written notice and payment

Tax reporting:

Reportable events tied to exercise or sale for IRS reporting

Milestones from grant to post-exercise (sequential view)

Track the lifecycle as numbered milestones so stakeholders know when obligations and rights activate or terminate.

01

Grant executed

Agreement signed and effective; vesting clock starts.

02

Vesting events

Periodic vesting transfers exercise eligibility per schedule.

03

Exercise event

Grantee submits notice and payment within the exercise window.

04

Post-exercise record

Update capitalization table and complete tax reporting.

Primary risks and penalties from an incorrect or incomplete Option Agreement

Tax reporting errors: IRC §6721 penalties possible

Backup withholding: 24% may apply for missing TIN

Missed exercise: Right may lapse permanently

Transfer breaches: Contract damages or injunctive relief

Authority defects: Enforceability challenge for lack of approvals

Notarization gaps: Recordability or probate complications

Common mistakes to avoid when preparing an Option Agreement

Using vague price adjustment language that leaves calculation to later interpretation, creating dispute risk.
Failing to record effective and expiration dates clearly, which can cause an option to be treated as expired.
Omitting signatory capacity lines (title and authority), leading to challenges to enforceability under corporate law.
Not specifying tax treatment or withholding obligations, producing unexpected withholding or reporting penalties.

Practical tips for accurate, efficient Option Agreement preparation

Apply these practices to reduce errors, simplify execution, and make post-exercise administration straightforward.

Use clear definitions

Define terms like 'Exercise Price' and 'Business Day' at the top of the agreement to avoid interpretation disputes; consistent definitions reduce litigation risk and simplify automated processing when using templates.

Include exhibits

Attach schedules, cap table entries, or property descriptions as exhibits to ensure the subject matter is unambiguous and to make future audits or transfers easier for legal and tax teams.

State governing law

Select the governing state explicitly and confirm its rules on electronic signatures, notarization, and any industry-specific statutory requirements to reduce jurisdictional uncertainty.

Preserve audit trail

Use an e-signature process that captures identity, timestamps, and IP addresses so you can demonstrate intent and attribution if a party disputes execution.

Real-world examples of Option Agreement usage

These case summaries show common scenarios where a well-drafted option agreement clarified rights and sped execution.

Optica Ventures — Brian Fitzgibbons

A venture firm used a standardized option template to grant investor rights during due diligence, ensuring consistency across deals.

The template clarified exercise price adjustments tied to financing.
The standardized approach reduced negotiation time and made investor reporting and cap table updates predictable and auditable for the firm.

Martin Properties — Tim Martin

A property developer used a land option to secure a parcel pending zoning approval, preserving purchase terms while approvals matured.

The option defined the exercise window tied to rezoning outcomes.
This preserved the developer’s price certainty and allowed staged investment while the municipal process completed, avoiding early acquisition costs.

Common eSignature vendor pricing and feature snapshot for executing Option Agreement Forms

Compare starting price and select feature criteria when choosing a platform for signing and storing Option Agreement Forms; signNow is listed first per comparison conventions.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial	No	No	Yes	Yes
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No
Envelope Cap	No cap	100 envelopes/user/year	Varies by plan	Varies by plan	Varies by plan

Frequently asked questions about Option Agreement Forms and e-signing

Answers to common procedural and legal questions encountered when preparing and signing Option Agreement Forms electronically.

Need help? Contact support

Can an option be e-signed?
Yes. Under the federal ESIGN Act (15 U.S.C. ch. 96) and state UETA statutes, electronic signatures are generally enforceable if intent, consent, attribution, and record retention are present.
Is notarization required?
Not usually for standard option agreements unless state law or recording requirements demand acknowledgment; deeds or recorded instruments commonly need notarization.
What if a party signs the wrong version?
Correct by executing an amendment or a replacement agreement signed by all parties. Preserve both versions and record the amendment showing contemporaneous intent to replace earlier terms.
How to prove signer identity?
Use multi-factor authentication, SMS codes, or knowledge-based authentication; retain audit logs capturing timestamps, IP addresses, and authentication events to support attribution.
Can I revoke an option?
Revocation depends on contract terms; unilateral revocation after grant is limited unless the agreement permits; follow the agreement’s amendment or termination provisions.
How should executed copies be stored?
Keep signed originals and secure electronic copies with audit trails and access controls. Retain per tax and regulatory guidance and your corporate records retention schedule.

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