Are electronically signed options enforceable?

Yes. Electronic signatures meet the ESIGN Act standard (15 U.S.C. §7001) and UETA in most states when the parties demonstrate intent, consent, attribution, and record retention for reproducibility.

Do option notices require notarization or witnesses?

It depends. Notices alone typically do not require notarization, but instruments creating or conveying property interests may require a notary or witnesses per state recording rules.

Can an option be revoked after grant?

Revocation depends on the contract terms; absent a reservation of revocation, unilateral revocation during the option period often is barred if supported by consideration.

What happens if an exercise notice is late or defective?

A late or defective notice can result in forfeiture of rights or a breach claim. Many agreements include short cure periods; comply strictly with notice form and delivery rules to avoid disputes.

How do I amend an existing option clause?

Amendments require mutual written agreement, signed by authorized parties. For real estate options, record any amendment that affects title or priority as required by local recorder rules.

How should I store executed option agreements?

Retain executed originals or certified copies with audit trails and ensure secure backup. Maintain retention schedules that meet IRS, HIPAA, or other applicable regulatory requirements.

Electronic Signature
Templates
Miscellaneous
Option Clause Agreement

Option Clause Agreement

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

Option Clause Agreement

This Option Clause Agreement (the Agreement) is entered into effective as of (Effective Date), by and between:

Optionor (Grantor): Optionor Address: Optionee (Holder): Optionee Address:

RECITALS

WHEREAS, Optionor is the lawful owner or authorized holder of the right, title, or interest in and to the asset or assets described below and has the full authority to grant an option with respect thereto; and

WHEREAS, Optionee desires to obtain, and Optionor desires to grant, an exclusive option to acquire the Asset (as defined below) on the terms and conditions set forth in this Agreement; and

WHEREAS, the parties intend by this instrument to set forth the full terms of the option grant, exercise procedures, consideration, and post-exercise obligations.

ASSET DESCRIPTION

Property / Asset Description:

OPTION GRANT

Optionor hereby grants to Optionee an exclusive, irrevocable option (the Option) to purchase the Asset described above, subject to the terms of this Agreement. The Option comprises the right, but not the obligation, to acquire the Asset upon payment of the Option Price and satisfaction of the conditions set forth herein.

Option Period (length of time during which Option may be exercised): from the Effective Date.

EXERCISE OF OPTION

Exercise Procedure: Optionee shall exercise the Option by delivering to Optionor a written Notice of Exercise in the form specified below, accompanied by payment of any required deposit and following satisfaction of any express conditions precedent contained in this Agreement. Notice of Exercise must be delivered to Optionor at the address set forth above in writing by hand delivery or certified mail, return receipt requested, or by such other method of delivery as the parties may agree in writing.

Notice Delivery Address for Exercise (if different):

PAYMENT TERMS

Option Price (total consideration payable upon exercise): .

Deposit upon Exercise (if any): Payment Schedule / Method:

Late Payment: Any payment not timely made within days after the due date shall accrue interest at a rate of or the maximum permitted by law, whichever is less, plus all costs of collection, including reasonable attorneys' fees.

SCOPE OF WORK AFTER EXERCISE

Scope of Work / Post-Exercise Obligations:

TERM AND TERMINATION

Term Commencement Date: . Term Expiration Date (if applicable): .

Termination for Cause: 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 written notice specifying the nature of the breach.

Termination Without Cause: This Agreement may be terminated by either party upon written notice to the other party delivered not less than days prior to the effective termination date.

CONFIDENTIALITY

Each party agrees that all non-public information, documentation, pricing, technical data, specifications, negotiations, and other proprietary information disclosed by a disclosing party to the receiving party in connection with this Agreement is Confidential Information. The receiving party shall not use or disclose Confidential Information except as necessary to perform its obligations under this Agreement or as required by law, provided that the receiving party gives prompt written notice to the disclosing party of any compelled disclosure and cooperates in any attempt to obtain protective relief. Confidentiality obligations shall remain in effect for years following the Effective Date.

REPRESENTATIONS AND WARRANTIES

Optionor represents and warrants that Optionor has good and marketable title to the Asset, that the Asset is free of undisclosed liens or encumbrances, and that Optionor has full authority to grant the Option. Optionee represents that Optionee has the corporate or other authority necessary to enter into this Agreement and perform its obligations hereunder. Each representation and warranty set forth in this section shall survive the closing of any transaction following exercise of the Option for a period of .

REMEDIES AND SPECIFIC PERFORMANCE

The parties agree that monetary damages may be inadequate to protect the parties' interests in the event of a breach of this Agreement, and that either party shall be entitled to seek specific performance, injunctive relief, or other equitable remedies without the requirement to post bond, in addition to any other remedies at law or equity.

ASSIGNMENT

Neither party may assign its rights or delegate its obligations under this Agreement without the prior written consent of the other party, which consent shall not be unreasonably withheld; provided, however, that either party may assign this Agreement in its entirety to an affiliate or to a successor by merger or sale of substantially all of its assets without such consent.

NOTICES

All notices required or permitted by this Agreement shall be in writing and shall be deemed given when delivered in person, sent by nationally recognized overnight courier, or three (3) days after deposit in the U.S. mail, postage prepaid, addressed to the parties at the addresses set forth above or to such other address as either party may specify by notice to the other.

GOVERNING LAW

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

ENTIRE AGREEMENT

This Agreement, together with any attachments or signed addenda, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous oral or written agreements, understandings, negotiations and discussions between the parties relating to the same. No modification, amendment, or waiver of any provision of this Agreement shall be effective unless in writing and signed by both parties.

SEVERABILITY; WAIVER

If any provision of this Agreement is held invalid or unenforceable, that provision shall be enforced to the maximum extent permissible and the remaining provisions shall remain in full force and effect. Failure of either party to enforce any right or remedy shall not constitute a waiver of such right or remedy in the future.

Optionor (Grantor):

Printed Name:

By:

Date:

Optionee (Holder):

Printed Name:

By:

Date:

What an Option Clause Agreement Is and When It Applies

An Option Clause Agreement is a contractual provision that grants one party the conditional right, but not the obligation, to take a specified action — commonly to purchase or lease an asset, exercise a license, or convert securities — within a defined period under stated terms. The clause sets the option price, exercise window, notice method, and any conditions precedent. Well-drafted option clauses allocate risk, identify remedies for default, and specify governing law, notice addresses, and signature lines to support enforceability under contract law and applicable e-signature statutes.

Why a Clear Option Clause Agreement Matters

A precise option clause reduces ambiguity about when and how an option can be exercised, limits disputes over price and timing, and preserves remedies for both parties. It documents consideration, notice procedures, and governing law so the option holder and grantor understand their rights and obligations.

Typical Parties Who Use Option Clauses

Use these profiles to identify whether an option clause suits your transaction and to tailor terms for the relevant industry and risk profile.

Real estate investors and landlords who grant purchase or lease options for property within a specified exercise window.
Licensors and licensees who need a mechanism to secure future rights to technology, IP, or distribution under defined terms.
Corporate issuers, employees, and startups for stock option grants and convertible instrument conversions tied to milestone dates.

Core Elements to Include in a Professional Option Clause

A complete option clause should be explicit about who has the option, how to exercise it, the deadline, price, notice procedures, and remedies for failure to comply.

Option Grant

Identify the grantor and optionee clearly, using full legal entity names, and state whether rights are exclusive or non-exclusive.

Option Period

Define the exercise window with precise start and end dates, time zone if relevant, and any conditions that extend or shorten the period.

Exercise Price

State the exact price or formula for price calculation and specify currency, payment terms, and acceptable payment methods.

Notice Procedure

Specify how exercise notices must be delivered (email, certified mail, eSign submission), who receives them, and when notices are effective.

Consideration

Record any consideration that supports the option (fee, deposit, or separate agreement) and whether it is refundable or credited on exercise.

Remedies

Set out remedies for failure to exercise or improper exercise — for example forfeiture, liquidated damages, specific performance, or termination rights.

Step-by-Step: How to Complete an Option Clause Agreement

Follow a consistent sequence to reduce risk: confirm parties, fill financial terms, set notice rules, then obtain signatures and retain copies.

01

Review Parties: Confirm legal names and authority to bind.
02

Set Dates: Enter effective and expiration dates exactly.
03

Fix Price: Specify exercise price or calculation method.
04

Execute: Obtain signatures and confirm delivery method.

How to Configure an Online Option Clause Workflow

Configure fields and routing to mirror the legal requirements for exercise notices, approval, and record retention.

Field	Configuration
Effective Date Field	Require MM/DD/YYYY with validation
Option Period Field	Start and end date with time zone
Exercise Notice Field	Attach signed notice PDF and timestamp
Approval Routing	Sequential signer order with reminders

Where to Send and How Signed Options Are Processed

Establish a clear flow from execution to storage: deliver notice, confirm receipt, record as required, and retain signed copies.

Deliver Notice: Send exercise notice per contract instructions.
Confirm Receipt: Obtain an acknowledgment or timestamp from recipient.
Record If Needed: Record against property if option creates an interest.
Store Executed Copy: Retain signed agreement and audit trail securely.

Technical and Format Requirements for Digital Execution

Choose a platform that provides audit trails, tamper-evident signed files, and integration with your recordkeeping systems to ensure reliable execution and retrieval.

Supported Formats: PDF, DOCX, and converted signed PDF
Authentication Options: Email code, SMS, or higher assurance
Integrations: CRM and document storage links

Key Dates and Timing Rules to Track

Timetable management is essential: track exercise deadlines, notice windows, closing targets, and recording requirements tied to the option.

Option Exercise Deadline:

Final date/time by which notice must be delivered and payment made.

Notice Cure Period:

Time allowed to correct defective notices if the contract permits.

Closing Date:

Target date for completing the transaction after exercise.

Recording Deadline:

Deadline to record instruments creating property interests when required.

Payment Timing:

Due date for exercise payment and accepted payment methods.

Common Mistakes to Avoid When Preparing an Option Clause

Vague exercise mechanics that fail to specify how and when a notice must be delivered, causing disputes over timeliness and validity.
Using informal or inconsistent party names that differ from corporate records or title documents, complicating enforcement or recording.
Failing to state whether consideration is refundable or credited on closing, which leads to disagreement about forfeiture or deposit treatment.
Neglecting to include notice addresses, time zone, or acceptable delivery methods, producing confusion about effective delivery and receipt.

Consequences of an Incorrect or Incomplete Option Clause

Forfeiture: Loss of the option right

Monetary Damages: Compensatory damages for breach

Specific Performance: Court-ordered performance possible

Recording Issues: Unrecorded interests may be unenforceable

Tax Reporting: Exercise can trigger taxable events

Litigation Costs: Attorney fees and court expenses

Comparing eSignature Vendors for Option Clause Execution

Vendor pricing and feature availability affect the cost and compliance of executing Option Clause Agreements; signNow is listed first for platform comparison.

	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	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No
Envelope Cap	No cap	100 env/user/yr	Varies	Varies	Varies

Frequently Asked Questions About Option Clause Agreements

Answers to common questions about enforceability, digital execution, amendment, revocation, and recording for option clauses.

Need help? Contact support

Are electronically signed options enforceable?
Yes. Electronic signatures meet the ESIGN Act standard (15 U.S.C. §7001) and UETA in most states when the parties demonstrate intent, consent, attribution, and record retention for reproducibility.
Do option notices require notarization or witnesses?
It depends. Notices alone typically do not require notarization, but instruments creating or conveying property interests may require a notary or witnesses per state recording rules.
Can an option be revoked after grant?
Revocation depends on the contract terms; absent a reservation of revocation, unilateral revocation during the option period often is barred if supported by consideration.
What happens if an exercise notice is late or defective?
A late or defective notice can result in forfeiture of rights or a breach claim. Many agreements include short cure periods; comply strictly with notice form and delivery rules to avoid disputes.
How do I amend an existing option clause?
Amendments require mutual written agreement, signed by authorized parties. For real estate options, record any amendment that affects title or priority as required by local recorder rules.
How should I store executed option agreements?
Retain executed originals or certified copies with audit trails and ensure secure backup. Maintain retention schedules that meet IRS, HIPAA, or other applicable regulatory requirements.

be ready to get more

Join over 28 million airSlate SignNow users

Sign Now