Can an option agreement be signed electronically?

Yes. Electronic signatures meet the ESIGN Act (15 U.S.C. ch. 96) and UETA requirements where adopted. Ensure intent, consent, attribution, and retention are documented to support enforceability.

When is notarization required?

Notarization is typically required when the agreement creates a record affecting real property or when local law requires an acknowledged instrument. Check county recorder rules before recording.

What happens if exercise terms are ambiguous?

Ambiguous exercise mechanics can lead courts to deny relief or find the option unenforceable. Use fixed dates, explicit notice procedures, and unambiguous payment terms to prevent disputes.

How should a company authorize a corporate signer?

Attach a corporate resolution or secretary certification showing signer authority. Online platforms may also accept a notarized or verified officer signature to confirm authority.

Are additional disclosures required for consumer transactions?

Yes. Consumer-facing electronic agreements that affect financial or healthcare benefits may require ESIGN consumer disclosures and an opportunity to withdraw consent under 15 U.S.C. §7001.

How long should executed agreements be retained?

Retain for the option term plus at least three years, and follow federal baselines such as IRC §6501(a) for tax records and 45 CFR §164.530(j) for HIPAA where applicable.

Electronic Signature
Templates
Legal
Option Agreement Template

Option Agreement Template

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

Option Agreement

This Option Agreement (the Agreement) is entered into as of the day of , , by and between Optionor Name: ("Optionor") and Optionee Name: ("Optionee").

Recitals

WHEREAS, Optionor is the legal and beneficial owner of the property or assets described below (the Asset), and has the right to sell, transfer or convey the Asset free of encumbrances except as disclosed in this Agreement;

WHEREAS, Optionee desires the exclusive right to purchase the Asset upon the terms and subject to the conditions set forth herein; and

WHEREAS, Optionor is willing to grant such an option to Optionee on the terms contained in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. Definitions

For purposes of this Agreement, the following terms shall have the meanings set forth below:

(a) "Asset" means the property, interests, shares or assets specifically described as:

(b) "Option Period" means the period commencing on the Effective Date set forth above and expiring on the day of , (the Expiration Date).

(c) "Purchase Price" means the aggregate consideration payable by Optionee to Optionor upon exercise of the Option, as set forth in Section 4.

2. Grant of Option

Optionor hereby grants to Optionee the exclusive, irrevocable option (the Option) to purchase the Asset on the terms and subject to the conditions set forth in this Agreement during the Option Period. The Option is personal to Optionee and shall not be assigned except as provided in Section 9.

3. Exercise of Option

(a) To exercise the Option, Optionee shall deliver to Optionor a written Exercise Notice stating Optionee's election to exercise the Option and specifying the proposed Closing Date, which shall be no earlier than days and no later than days after delivery of the Exercise Notice.

(b) The Exercise Notice shall be effective upon receipt by Optionor in accordance with Section 11. Optionee's failure to timely deliver the Exercise Notice prior to the Expiration Date shall extinguish the Option without further action.

4. Purchase Price; Payment

(a) The Purchase Price for the Asset shall be (the Purchase Price), payable as follows:

(i) A deposit in the amount of (the Deposit) shall be delivered with the Exercise Notice and shall be held by Optionor as non-refundable consideration for the grant of the Option, except as otherwise provided herein.

(ii) The balance of the Purchase Price shall be payable at Closing by wire transfer of immediately available funds, certified check or other method agreed by the parties in writing.

5. Closing

(a) The Closing shall occur on the Closing Date specified in the Exercise Notice and agreed by the parties, subject to satisfaction or waiver of the conditions precedent set forth in Section 8. The parties shall use commercially reasonable efforts to consummate the Closing on the agreed date.

(b) At Closing, Optionor shall deliver to Optionee a good and sufficient instrument of transfer conveying the Asset, free and clear of all liens, encumbrances and claims except for those expressly disclosed in writing prior to the Effective Date. Optionee shall deliver to Optionor the Purchase Price in accordance with Section 4.

6. Representations and Warranties

Optionor represents and warrants to Optionee that, as of the Effective Date and as of the Closing Date: (a) Optionor has full power and authority to grant the Option and to sell, convey and transfer the Asset; (b) the execution and performance of this Agreement and the consummation of the transactions contemplated hereby will not violate any material agreement, judgment, order, law or regulation; and (c) except as disclosed in writing to Optionee prior to the Effective Date, the Asset is free from any material liens, claims or encumbrances.

Optionee represents and warrants to Optionor that Optionee has the power and authority to enter into this Agreement, that this Agreement constitutes a valid and binding obligation of Optionee, and that exercise of the Option in accordance with this Agreement will not violate any material agreement, judgment, order, law or regulation.

7. Covenants

During the Option Period Optionor shall (a) maintain the Asset in its present condition except for ordinary wear and tear; (b) not enter into any agreement to sell, encumber or otherwise transfer the Asset; and (c) promptly notify Optionee of any notice, claim or proceeding that could materially impair Optionor's ability to consummate the sale of the Asset.

8. Conditions to Closing

The obligations of each party at Closing are subject to the satisfaction or waiver of customary conditions precedent, including without limitation: (a) the accuracy of the other party's representations and warranties as of the Closing Date; (b) the performance by the other party of its covenants in this Agreement; and (c) the absence of any injunction, order or law preventing the Closing.

9. Assignment

The Option may not be assigned by Optionee without the prior written consent of Optionor, which consent shall not be unreasonably withheld; provided, however, that Optionee may assign the Option to an affiliate with prior written notice to Optionor. Any attempted assignment in violation of this Section shall be null and void.

10. Termination

This Agreement and the Option shall terminate automatically upon the earliest to occur of: (a) the expiration of the Option Period; (b) mutual written agreement of the parties; or (c) material breach by a party of this Agreement that remains uncured for a period of days after written notice.

11. Notices

All notices, requests, consents and other communications required or permitted under this Agreement shall be in writing and shall be delivered personally, by certified mail (return receipt requested), by nationally recognized overnight courier, or by hand delivery to the addresses set forth below, and shall be deemed given upon receipt.

Notices to Optionor Attn: Notices to Optionee Attn:

12. Amendments

This Agreement may be amended or modified only by a written instrument executed by both parties. No oral modification shall be effective.

13. Waiver

No waiver of any provision of this Agreement shall be effective unless in writing and signed by the party against whom such waiver is asserted. No waiver of any breach shall constitute a waiver of any other breach.

14. Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the State of without regard to its conflicts of laws principles.

15. Entire Agreement

This Agreement, including its Exhibits and Schedules if any, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or written, of the parties relating thereto.

16. Severability

If any provision of this Agreement is held to be invalid, illegal or unenforceable under applicable law, such provision shall be stricken and the remaining provisions shall remain in full force and effect.

17. Counterparts

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 originals for all purposes.

Optionor

Printed Name:

By:

Date:

Optionee

Printed Name:

By:

Date:

What an Option Agreement Template Covers

An Option Agreement Template is a standardized contract that grants one party the right, but not the obligation, to buy, sell, or lease an asset at specified terms within a defined period. Commonly used for real estate (option to purchase), business transactions (stock or equity options), and commercial leases, the template records the option period, exercise price, consideration, notice procedures, and any conditions precedent. It provides a repeatable structure for negotiable terms while preserving room for custom clauses like assignment restrictions, default remedies, and governing law selection.

Why Use a Formal Option Agreement Template

A clear template reduces ambiguity about exercise mechanics and preserves enforceability by recording intent, price, timing, and signatures.

Who typically completes an Option Agreement

Organizations and individuals who need a controlled right to buy or sell often use option agreements to lock in terms while preserving flexibility.

Property owners and developers offering an option to purchase real estate in advance of a sale or development.
Startups and companies granting stock or equity options to employees, advisors, or investors under a formal plan.
Buyers, tenants, or investors who want temporary exclusive rights to decide later whether to complete a purchase.

Parties should ensure the person signing has corporate authority or ownership rights and that the document aligns with applicable state law.

Common signatories and their roles

Grantor — Property Owner

Typically the party granting the option. The Grantor must have authority to convey the underlying interest and should confirm title, encumbrances, and any conditions that affect exercise.

Optionee — Buyer/Holder

Holds the right to exercise. The Optionee must follow notice and payment procedures precisely; mistakes in exercise timing or payment often void the claimed right.

Essential clauses to include in the template

A professional Option Agreement Template groups critical clauses so parties can review economic terms, obligations, and remedies at a glance.

Option Period

Specific start and end dates, time-of-day rules for expiry, and whether extensions are permitted, with clear calendar-date format.

Exercise Price

Exact dollar amount or formula for calculating price at exercise; include payment method, escrow, and proration rules if applicable.

Consideration

Amount or value exchanged for the option right (nonrefundable or refundable), and treatment of consideration at closing or forfeiture.

Exercise Procedure

Step-by-step notice requirements, required documents, acceptable delivery methods, and deadline for funds or closing.

Representations

Key warranties about title, authority to grant the option, absence of liens, and any required disclosures under state law.

Governing Law

Designate the state law that will interpret the agreement and the forum for dispute resolution (court or arbitration).

Step-by-step: Completing and executing an Option Agreement

Follow these steps in sequence to prepare, sign, and preserve a binding option agreement with clear exercise mechanics.

01

Prepare Document: Populate template fields and attach exhibits such as legal description or schedules.
02

Review Terms: Confirm price, period, conditions, and any assignments or subordination clauses.
03

Sign and Authenticate: Execute with proper signer authority, notarization if required, and witness rules observed.
04

Distribute and Store: Provide executed copies to both parties and retain originals in a secure recordkeeping system.

Configuring an online signing workflow for the template

Set up a repeatable digital workflow that enforces signing order, authentication, and storage policies for option agreements.

Upload Document	Import PDF/DOCX and attach exhibits as separate pages for clarity.
Prepare Fields	Add signature, date, initials, and conditional fields for optional clauses.
Set Authentication	Require email or SMS codes; use stronger ID verification for high-value transactions.
Enable Bulk Send	Use for multiple optionees or templates with the same base terms.
Save Template	Keep a versioned template so edits require deliberate updates and audit logging.

Platforms and integrations that support digital option agreements

Choose a platform that supports PDF/DOCX, audit trails, and industry integrations to reduce friction and ensure evidence of execution.

Integrations: Salesforce | NetSuite | Microsoft 365 | Google Workspace
File Formats: PDF | Word DOCX | HTML | Excel
Security: TLS 1.2/1.3 in transit; AES-256 at rest

Where to send, record, and store the executed agreement

After execution, route copies to key stakeholders, record or file where necessary, and preserve a tamper-evident copy for audits and enforcement.

To the Optionee: Send an executed copy and instructions for exercising the option.
To the Grantor: Retain an original executed copy and internal approval documentation.
Recording Office: Record only if the agreement creates a document of public record (check county recorder rules).
Secure Archive: Store signed PDF with audit trail and backup copies in encrypted storage.

Security and compliance considerations

In-transit Encryption: TLS 1.2/1.3

At-rest Encryption: AES-256

Audit Trail: Tamper-evident logs

Regulatory Certs: SOC 2 Type II

E-signature Law: ESIGN and UETA compliant

Healthcare: HIPAA (BAA available)

Common mistakes to avoid when preparing an Option Agreement

Using vague exercise language such as 'within a reasonable time' instead of fixed calendar dates or concrete deadlines that determine enforceability.
Failing to state exact payment mechanics for exercise price, including escrow instructions, which can cause disputes at closing.
Not confirming signer authority for entities; missing corporate approvals, resolutions, or officer signatures can render the agreement voidable.
Skipping local recording or notary checks when the option affects real property, leading to title issues or unenforceability against third parties.

Consequences of an incorrect or incomplete agreement

Loss of Rights: Option voided if exercise procedure not followed

Title Problems: Unrecorded issues can affect future transfers

Financial Exposure: Forfeited consideration or litigation costs

Tax Issues: Reporting errors can trigger IRS penalties

Regulatory Risk: HIPAA or securities noncompliance where applicable

Enforceability Delays: Court disputes over ambiguous terms

Practical tips for reliable execution

Follow consistent formatting, clear numbering, and attach an executed signature page to reduce interpretation errors.

Use explicit dates

Always use MM/DD/YYYY format and specify time zone where precise expiration timing matters to avoid disputes over last-day exercise.

Record supporting exhibits

Attach property descriptions, financing contingencies, and any seller disclosures as numbered exhibits referenced in the main agreement.

Confirm authority

Obtain corporate resolutions or proof of power for signatories representing entities and store them with the executed agreement.

Preserve audit trail

Keep a secure, tamper-evident copy of the signed document and its execution metadata for compliance and litigation readiness.

Real-world examples of Option Agreement use

These examples illustrate how parties use option agreements to streamline transactions and preserve enforceable rights without immediate conveyance.

Optica Ventures — Brian Fitzgibbons

Optica used an option template to standardize purchase terms for multiple properties

The template clarified exercise steps and timing
This reduced negotiation cycles and improved customer clarity while maintaining consistent legal language for closing.

Martin Properties — Tim Martin

A developer used an option to buy contiguous lots pending zoning approval

The option held price and provided time for approvals
It allowed the developer to secure rights without immediate capital deployment while protecting against competing offers.

eSignature vendor comparison for executing Option Agreements

Comparison of common eSignature providers on price and core features relevant to contract execution and compliance; signNow appears 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 trial	Varies	Varies	Varies	Varies
Bulk Send	Yes (Business Premium)	Verify	Verify	Verify	Verify
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No

Frequently asked questions about Option Agreement Templates

Answers below address common execution, enforceability, and recordkeeping questions to reduce implementation errors and legal risk.

Need help? Contact support

Can an option agreement be signed electronically?
Yes. Electronic signatures meet the ESIGN Act (15 U.S.C. ch. 96) and UETA requirements where adopted. Ensure intent, consent, attribution, and retention are documented to support enforceability.
When is notarization required?
Notarization is typically required when the agreement creates a record affecting real property or when local law requires an acknowledged instrument. Check county recorder rules before recording.
What happens if exercise terms are ambiguous?
Ambiguous exercise mechanics can lead courts to deny relief or find the option unenforceable. Use fixed dates, explicit notice procedures, and unambiguous payment terms to prevent disputes.
How should a company authorize a corporate signer?
Attach a corporate resolution or secretary certification showing signer authority. Online platforms may also accept a notarized or verified officer signature to confirm authority.
Are additional disclosures required for consumer transactions?
Yes. Consumer-facing electronic agreements that affect financial or healthcare benefits may require ESIGN consumer disclosures and an opportunity to withdraw consent under 15 U.S.C. §7001.
How long should executed agreements be retained?
Retain for the option term plus at least three years, and follow federal baselines such as IRC §6501(a) for tax records and 45 CFR §164.530(j) for HIPAA where applicable.

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