30 Questions
What is the general rule regarding the termination of an ordinary revocable offer?
The offerer can terminate the offer before it has been accepted by communicating the revocation with the offeree.
Under what circumstances may an option be transferred through session?
An option may be transferred through session unless it is prohibited in terms of the option or if the option is personal to the offeree.
Why may an option not be transferred in cases where the identity of the offeree is important to the offerer?
In such cases, the option may not be transferred because it will be personal to the offeree.
What is the legal effect of an option in a contract?
An option renders an offer irrevocable, and any attempt to revoke the offer constitutes a breach of contract.
What happens if an option fails to specify a time period within which it must be exercised?
Failure to specify a time period for exercising the option will result in automatic termination.
How does the death of a party involved in an option contract impact the contract?
The death of either party does not terminate an option unless explicitly or implicitly stipulated in the contract.
What is the purpose of an option contract?
To restrict the offeror's right to revoke an offer, keeping the offer open for a specified period of time.
Describe a preference contract.
A preference contract binds one person to give preference to another when concluding a specific type of agreement.
What does an option holder need to do to bring a contract into existence?
Exercise the option and accept the offer.
Can an option be granted for free?
Yes, an option may be granted graciously without any consideration.
What are the two parts of an option?
The main offer and the ancillary offer.
How long is the offerer restricted from revoking the offer in an option contract?
For the stipulated period of time mentioned in the contract.
What are the formality requirements for the main offer in a contract?
It must be in writing to be valid.
According to the ruling in the case of Mookoni versus Tasos Properties, do the formality requirements for the main offer also apply to the ancillary offer?
No, the formality requirements for the main offer do not apply to the ancillary offer.
What are the options available to the innocent party in case of a material breach of the option in a contract?
They can cancel the contract and seek restitution, or uphold the contract and claim damages.
What is the purpose of claiming damages in a contract after a material breach of the option?
To put the innocent party in the financial position they would have been in if the other party had complied with the option.
Define a preference contract.
A preference contract is an agreement where one person binds themselves to give preference to another if they decide to conclude a specified type of agreement.
What is another term for a preference contract?
A right of first refusal or a right of preemption.
What civil remedies may the grantee be entitled to if the grantor is in breach of a preference contract?
The same civil remedies as discussed under options, as well as the ORIX mechanism.
In what situation can the holder of the right of preemption step into the position of a third party in a transaction?
When a seller concludes a contract of sale with a third party in breach of the right of preemption.
What is the right of preemption remedy in contracts?
A remedy concluded between the seller and the holder of the right of preemption.
What are some of the practical problematic areas and criticisms associated with the right of preemption remedy?
As discussed in the textbook, this remedy has practical problematic areas and criticisms.
When can the holder of the right of preemption seek to step into the position of the third party?
If the seller concludes a contract of sale with a third party in breach of the right of preemption.
What is the ORIX mechanism used for in relation to breaches of preference contracts?
The grantee may use the ORIX mechanism to stop the conclusion of a contract or sale of the property if the grantor is in violation of the preference contract.
What is the main difference between a right of preemption and a preference contract?
The main difference is that a right of preemption involves a negative contract not to sell the property to a third party without giving the grantee first refusal, while a preference contract creates both negative and positive obligations for the grantor.
How can a grantor avoid a preemption agreement by making an unreasonable offer?
A grantor cannot avoid a preemption agreement by making an unreasonable offer; they must make a good faith offer to the grantee if they decide to sell.
What criteria can be used to assess if a grantor is acting in bad faith when making an offer to the grantee?
Objective criteria can be used to assess if the grantor is acting in bad faith when making an offer to the grantee.
What must the grantor do when making an offer to the grantee in terms of keeping the offer open?
The grantor must keep the offer open for a reasonable period of time when making an offer to the grantee.
Under what circumstance can a grantor withdraw an offer made to a grantee?
A grantor may withdraw the offer made to a grantee if they genuinely change their mind about selling the property, unless an option has been entered into with the grantee.
How are the terms and conditions of a preference contract enforced in relation to the offer to the grantee?
The terms and conditions stipulated in the preference contract must be incorporated in the offer made to the grantee by the grantor.
Learn about Bactalicontrahendo contracts which include option and preference contracts. Explore how option contracts limit the offeror's ability to revoke an offer and preference contracts bind one party to give preference to another.
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