Are electronic signatures valid for this agreement?

Yes. Electronic signatures are enforceable under the federal ESIGN Act (15 U.S.C. ch. 96, 2000) and state UETA laws where adopted, provided the signature demonstrates intent, consent, attribution, and record retention.

Do option agreements require notarization or witnesses?

Notarization requirements depend on whether a recorded instrument or memorandum is executed; deeds and recordable documents typically require notarization. Witness requirements vary by state; consult local recording and notary rules.

Can the option be revoked after execution?

Revocation depends on contract terms. If the agreement specifies irrevocability for the option term, unilateral revocation may breach the contract and expose the revoking party to damages.

What happens if the buyer misses the exercise deadline?

Missing the specified exercise deadline typically causes the option to lapse; remedies depend on contract language and whether equitable relief is available under governing law.

How should I store the executed agreement?

Store signed originals and electronic copies with secure retention, preserving metadata and audit trails. Follow applicable retention rules such as IRC §6501(a) for tax records and 45 CFR §164.530(j) for HIPAA.

When is attorney review recommended?

Seek counsel for high-value transactions, unusual contingencies, ambiguous asset descriptions, or when cross-jurisdictional or regulatory approvals are required.

Electronic Signature
Templates
Legal
Option Purchase Agreement

Option Purchase Agreement

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OPTION PURCHASE AGREEMENT

This Option Purchase Agreement (the "Agreement") is made as of by and between Seller Name: of Address: (Seller), and Buyer Name: of Address: (Buyer). Each of Seller and Buyer may be referred to herein individually as a "Party" and collectively as the "Parties."

RECITALS

WHEREAS, Seller is the owner of certain property, assets and rights more particularly described below and has authority to grant an option to purchase the Property free of encumbrances other than those disclosed in Section 6; and

WHEREAS, Buyer desires to obtain from Seller an exclusive and transferable option to purchase the Property upon the terms and conditions set forth in this Agreement; and

WHEREAS, the Parties intend that the grant of the option and the exercise procedure, including purchase price and closing mechanics, be governed by the terms contained herein.

NOW, THEREFORE, in consideration of the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties agree as follows:

1. DEFINITIONS

1.1 "Property" means the assets, real property, business interests, and/or intellectual property described in the Property Description below, and all rights, privileges and appurtenances thereto.

1.2 "Option" means the exclusive right granted by Seller to Buyer to purchase the Property upon the terms and subject to the conditions of this Agreement.

2. PROPERTY DESCRIPTION

Property Description

3. GRANT OF OPTION

3.1 Grant. Subject to the terms and conditions of this Agreement, Seller hereby grants to Buyer an exclusive Option to purchase the Property on the terms set forth herein. The Option is personal to Buyer and, except as expressly provided in Section 12, is not transferable without Seller's prior written consent.

3.2 Option Consideration. In consideration for the grant of the Option, Buyer shall pay to Seller an option payment in the amount of (the "Option Price"), payable upon execution of this Agreement unless otherwise agreed in writing.

4. OPTION PERIOD; EXERCISE

4.1 Term. The Option shall commence on and shall expire at 5:00 p.m. local time on (the "Option Period"), unless earlier terminated in accordance with this Agreement.

4.2 Exercise Procedure. Buyer may exercise the Option by delivering written notice of exercise (the "Notice of Exercise") to Seller during the Option Period. Notice of Exercise must be signed by an authorized representative of Buyer and delivered in accordance with Section 14. The Notice of Exercise shall specify the intent to purchase the Property and the proposed Closing date, which shall be no fewer than nor more than days after Seller's receipt of such notice, unless otherwise agreed in writing.

5. CLOSING

5.1 Closing. If Buyer validly exercises the Option, the Parties shall consummate the purchase and sale at a Closing to occur on the Closing date specified in the Notice of Exercise and confirmed by Seller, subject to satisfaction or waiver of the conditions set forth in Section 7. Closing shall take place at a location mutually agreed by the Parties or by exchange of documents if permitted by law.

5.2 Purchase Consideration. At Closing, Buyer shall pay to Seller the balance of the Purchase Price, equal to the agreed purchase price less the Option Price, by wire transfer of immediately available funds or other method acceptable to Seller.

6. TITLE, SURVEYS AND ENCUMBRANCES

6.1 Title. Seller shall convey good and marketable title to the Property at Closing by appropriate deed or bill of sale, free and clear of liens and encumbrances except as expressly set forth in Schedule A attached hereto and any matters approved in writing by Buyer prior to Closing.

6.2 Survey and Inspections. Buyer shall have the right to obtain surveys, inspections, environmental reports and other investigations at Buyer's expense prior to exercise of the Option. Any material adverse condition revealed by such investigations that is not disclosed by Seller shall constitute a basis for Buyer to terminate the exercise or require Seller to cure such condition prior to Closing.

7. CONDITIONS TO CLOSING

7.1 Seller's Conditions. Seller's obligations at Closing are subject to the accuracy of Buyer's representations and warranties, Buyer's delivery of required closing funds, and Buyer's performance of its covenants under this Agreement.

7.2 Buyer's Conditions. Buyer's obligations at Closing are subject to the accuracy of Seller's representations and warranties set forth in Section 8, Seller's delivery of marketable title, and the absence of any litigation or governmental restraint that would prohibit transfer of the Property.

8. REPRESENTATIONS AND WARRANTIES

8.1 Seller's Representations. Seller represents and warrants to Buyer that: (a) Seller has full right, title and authority to grant the Option and to consummate the transactions contemplated by this Agreement; (b) there are no actions, claims or proceedings pending or, to Seller's knowledge, threatened against Seller that would adversely affect Seller's ability to convey the Property; and (c) Seller has not granted any option, right of first refusal or other agreement exercisable by a third party that would conflict with the Option granted herein.

8.2 Buyer's Representations. Buyer represents and warrants to Seller that Buyer has the full power and authority to enter into this Agreement and to perform its obligations hereunder and that the execution and performance of this Agreement will not violate any agreement to which Buyer is a party.

9. INDEMNIFICATION

9.1 Mutual Indemnification. Each Party shall indemnify, defend and hold harmless the other Party and its officers, directors, agents and employees from and against any and all losses, liabilities, damages, claims and expenses (including reasonable attorneys' fees) arising from a breach of such Party's representations, warranties or covenants contained in this Agreement.

10. TAXES, COSTS AND ALLOCATIONS

10.1 Allocation of Closing Costs. Unless otherwise agreed in writing, Seller shall be responsible for any transfer taxes and Seller's closing costs, and Buyer shall be responsible for Buyer's closing costs, including recording fees and Buyer’s counsel fees. Any real property transfer taxes shall be allocated as required by applicable law unless otherwise agreed.

11. DEFAULT; REMEDIES

11.1 Seller Default. If Seller materially breaches this Agreement or wrongfully refuses to convey the Property after valid exercise of the Option, Buyer shall be entitled to seek specific performance or pursue any other remedies available at law or in equity, including recovery of damages.

11.2 Buyer Default. If Buyer fails to timely perform its obligations following exercise of the Option, Seller may retain the Option Price as liquidated damages or pursue any other rights and remedies available under this Agreement or applicable law.

12. ASSIGNMENT

12.1 Assignment. Buyer may not assign or transfer the Option or any rights hereunder without the prior written consent of Seller, which consent shall not be unreasonably withheld, except that Buyer may assign the Option to an affiliate upon notice to Seller. Any purported assignment in violation of this Section shall be void.

13. CONFIDENTIALITY

13.1 Confidential Information. Except as required by law, the Parties shall maintain in confidence the terms of this Agreement and any non-public information exchanged in connection with the Option and any resulting transaction. Disclosure may be made to affiliates, advisors, lenders or as required in legal or regulatory proceedings if the disclosing party provides prior notice where practicable.

14. NOTICES

14.1 Method. All notices or other communications required or permitted under this Agreement shall be in writing and shall be delivered by personal delivery, certified mail (return receipt requested), or reputable overnight courier to the addresses set forth below or to such other address as a Party may designate in writing.

Seller Notice Address Buyer Notice Address

15. MISCELLANEOUS

15.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the state or jurisdiction specified by the Parties at the time of execution, without regard to conflict of laws principles; the Parties submit to the exclusive jurisdiction of such courts for the resolution of disputes.

15.2 Entire Agreement. This Agreement, including any schedules or attachments expressly incorporated herein, 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.

15.3 Amendments; Waiver. No amendment, modification or waiver of any provision of this Agreement shall be effective unless in writing and signed by the Parties. No failure or delay by any Party in exercising any right shall operate as a waiver of that right.

15.4 Severability. If any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect, the remaining provisions shall remain in full force and effect and shall be construed so as to effectuate the original intent of the Parties to the fullest extent permitted by law.

15.5 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 electronically or by facsimile shall be deemed to be original signatures for all purposes.

ADDITIONAL PROVISIONS

Special Stipulations or Conditions

Seller - Printed Name:

By:

Date:

Buyer - Printed Name:

By:

Date:

What an Option Purchase Agreement Is and When It’s Used

An Option Purchase Agreement is a legally binding contract that gives a potential buyer (the optionee) the right, but not the obligation, to purchase specified property or assets from the seller (the optionor) within a defined period and at predetermined terms. Typical provisions include the description of the underlying asset, option price, exercise period, deposit or consideration, notice procedures, and closing mechanics. Parties commonly use these agreements in real estate, business acquisitions, and equipment sales to secure exclusive negotiating rights without obligating an immediate purchase.

Why an Option Purchase Agreement Matters

An Option Purchase Agreement protects both parties by fixing key terms (price, period, and procedure) while preserving flexibility for the prospective buyer. It reduces negotiation uncertainty, allocates risk, and creates a clear pathway to closing if the buyer exercises the option.

Who Typically Prepares and Signs This Agreement

Each role has different responsibilities: buyers confirm financing and inspections; sellers preserve title and confirm performance conditions.

Buyers and investors seeking time-limited exclusive purchase rights without immediate commitment.
Sellers or asset holders who want binding interest without transferring title until closing.
Brokers, attorneys, and escrow agents who prepare, review, and manage closing deliverables.

Core Elements to Include in a Professional Agreement

A thorough Option Purchase Agreement anticipates exercise mechanics, payment flow, contingencies, and consequences for default to ensure enforceability and reduce later disputes.

Asset Description

A precise legal description of the property or assets covered by the option, including parcel ID or inventory identifiers where applicable to avoid ambiguity.

Option Price

The price or formula used if the option is exercised; specify whether the option fee is credited toward purchase or retained by the seller.

Option Period

Clear start and end dates, including time of day and any automatic extensions or notice windows tied to performance milestones.

Exercise Procedure

How and where the optionee must deliver written notice, acceptable forms of delivery, and any required deposits to effectuate exercise.

Conditions & Contingencies

Inspection, financing, title, and regulatory conditions that must be satisfied before closing or that permit termination.

Remedies and Termination

Default remedies, forfeiture rules for option fees, mutual termination rights, and allocation of costs if the option is not exercised.

Step-by-Step: How to Complete the Agreement

Follow these steps in sequence to minimize omissions and speed execution.

01

Gather party details: Collect legal names, addresses, and authorized signatory information.
02

Draft core terms: Specify asset, option price, period, deposit, and exercise mechanics.
03

Add conditions: Include inspection, financing, title, and regulatory contingencies.
04

Sign and execute: Obtain all signatures, notarizations if required, and distribute executed copies.

Where to Send, File, and Deliver Documents

Routing and filing depend on the asset type and local practice; document the delivery methods to avoid disputes.

Seller and Buyer: Each party receives a fully executed original or certified copy.
Escrow Agent: Deliver deposits and exercise notices to the named escrow holder per the agreement.
Title Company: Provide the executed agreement to the title company for closing and recording preparation.
Recording Office: Record any interest or memorandum of option as required by local recorder practices.

Configuring an Online Completion Workflow

When using an eSignature platform, set field types, signer order, and authentication to match the agreement’s requirements.

Field	Configuration
Signature Fields	Assign to named signers; require date fields with MM/DD/YYYY
Conditional Fields	Show financing contingencies only if 'contingent' is selected
Signer Authentication	Use email plus SMS or KBA for added attribution
Audit Trail	Enable timestamp and IP capture for each signature event

Digital Signing and eSubmission Considerations

Choose a provider that meets legal and industry requirements and that can export signed PDFs and retention metadata for long-term storage.

Authentication: Email, SMS, or KBA options
Audit Trail: Timestamps and action logs
Integrations: CRM, cloud storage supported

Common Timelines and Deadlines to Track

Key dates must be tracked precisely; use calendar reminders tied to the effective date to preserve rights and meet closing requirements.

Option Deposit Due:

Deposit payable on execution or per date specified in agreement; typically immediate.

Option Period Expiration:

Commonly 30–90 days; confirm exact MM/DD/YYYY end date in agreement.

Exercise Notice Deadline:

Notice must be delivered per agreement — often several business days before closing.

Closing Date:

Set a binder closing date and any extension procedures in the agreement.

Recording Deadline:

Record deeds or memoranda promptly after closing to protect title interests.

Common Mistakes to Avoid

Using vague descriptions for the asset that later cause disputes about what was covered by the option.
Failing to specify whether the option fee is refundable or credited at closing, leading to claim disputes.
Missing notice or delivery requirements for exercise, which can cause forfeiture of the option right.
Neglecting to include contingency deadlines (finance, inspection) and how they affect the option period.

Potential Consequences of Errors

Loss of Deposit: Forfeiture if buyer breaches

Contract Voidability: Ambiguity can render agreement unenforceable

Monetary Damages: Seller or buyer may claim losses

Recording Issues: Unrecorded interests may lack priority

Tax Consequences: Improper treatment of option fee as income

Compliance Risk: Failure to meet notice rules

eSignature Vendor Pricing and Feature Snapshot

Compare common vendor starting prices and key capabilities relevant when executing Option Purchase Agreements; signNow is listed first per vendor format requirements.

	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 credit card	Varies by plan	Varies by plan	Yes, limited	Yes, limited
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 Purchase Agreements

Answers to common legal and execution questions to reduce risk and speed implementation.

Need help? Contact support

Are electronic signatures valid for this agreement?
Yes. Electronic signatures are enforceable under the federal ESIGN Act (15 U.S.C. ch. 96, 2000) and state UETA laws where adopted, provided the signature demonstrates intent, consent, attribution, and record retention.
Do option agreements require notarization or witnesses?
Notarization requirements depend on whether a recorded instrument or memorandum is executed; deeds and recordable documents typically require notarization. Witness requirements vary by state; consult local recording and notary rules.
Can the option be revoked after execution?
Revocation depends on contract terms. If the agreement specifies irrevocability for the option term, unilateral revocation may breach the contract and expose the revoking party to damages.
What happens if the buyer misses the exercise deadline?
Missing the specified exercise deadline typically causes the option to lapse; remedies depend on contract language and whether equitable relief is available under governing law.
How should I store the executed agreement?
Store signed originals and electronic copies with secure retention, preserving metadata and audit trails. Follow applicable retention rules such as IRC §6501(a) for tax records and 45 CFR §164.530(j) for HIPAA.
When is attorney review recommended?
Seek counsel for high-value transactions, unusual contingencies, ambiguous asset descriptions, or when cross-jurisdictional or regulatory approvals are required.

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