Revocable Offer and Transferring Options Quiz

Play an AI-generated podcast conversation about this lesson

What is required by law for certain types of contracts like the sale of land to be valid?

Being witnessed by a lawyer

Being oral

Being registered with the court

Being in writing (correct)

According to the ruling in Mookoni versus Tasos Properties, what is the relationship between formality requirements for the main offer and the ancillary offer?

Only the main offer must be in writing

The main offer can be oral while the ancillary offer must be in writing

They must both be in writing

Only the ancillary offer must be in writing (correct)

In the event of a material breach of an option, what choices does the innocent party have?

Uphold the contract and seek restitution or claim damages

Cancel the contract and seek restitution or uphold the contract and claim damages (correct)

Cancel the contract only

Seek restitution only

What is the purpose of claiming damages in case of a material breach of an option?

To put the innocent party in their expected financial position Signup and view all the answers

What is another term for a preference contract where one person agrees to give preference to another in certain circumstances?

Right of first refusal Signup and view all the answers

Which type of agreement involves giving preference to another person if a specific type of agreement is concluded?

Right of preemption Signup and view all the answers

What is the general rule for terminating an ordinary revocable offer before acceptance?

The offerer must communicate the revocation with the offeree Signup and view all the answers

When can an option be transferred through session?

When the identity of the offeree is not important to the offeror Signup and view all the answers

What is the legal effect of an option on an offer made by the offeror?

Renders the offer irrevocable Signup and view all the answers

What happens if an option does not specify a time period for its exercise?

The offer must be kept open for a reasonable period of time Signup and view all the answers

In what circumstance does the death of a party terminate an option?

When the contract explicitly includes such a provision Signup and view all the answers

What did the case of Hitch versus Nel provide guidance on?

Transferability of options and credit sale differentiation Signup and view all the answers

In a right of preemption, what is the primary obligation of the grantor?

To offer the property to the grantee before offering it to any third party. Signup and view all the answers

What distinguishes a preference contract from a right of preemption?

A right of preemption gives the grantee the first opportunity to purchase before any third party. Signup and view all the answers

What does the grantee acquire in a right of preemption?

The preferential right to buy if and when the grantor decides to sell. Signup and view all the answers

What is one key difference between an option and a right of preemption?

An option forces the grantor to sell, while a right of preemption does not. Signup and view all the answers

According to case law in Sotterio versus Redco, Pinetons, Pty Ltd, what is one obligation of the grantor?

To provide the grantee with a correlative legal right not to sell. Signup and view all the answers

What happens if a grantee rejects an offer in a preference contract?

The grantor can then make an offer to a third party. Signup and view all the answers

What does the right of preemption involve?

A negative contract not to sell the property to a third party without giving the grantee the first refusal Signup and view all the answers

What are the obligations of the grantor in a preference contract?

To make a good faith offer to the grantee before making an offer to a third person Signup and view all the answers

How can the grantor avoid the preemption agreement by making an unreasonable offer?

By genuinely changing their mind about selling the property Signup and view all the answers

What must be done with the terms and conditions stipulated in the preference contract?

They must be incorporated in the offer to the grantee Signup and view all the answers

How can it be determined whether the grantor is acting in bad faith?

By using objective criteria to assess the offer Signup and view all the answers

What determines how long an offer from a grantor to a grantee must be kept open?

The facts and circumstances of the individual case Signup and view all the answers

What remedies may the grantee be entitled to if the grantor breaches a preference contract?

Civil remedies and the ORIX mechanism Signup and view all the answers

In what situation may the holder of the right of preemption step into the position of a third party?

If the seller concludes a contract of sale with a third party in breach of the right of preemption Signup and view all the answers

What is the OREX mechanism used for?

To allow the holder of the right of preemption to step into a transaction Signup and view all the answers

Which case developed the OREX mechanism?

Associated SA Bakeries, Pty Ltd versus OREX Signup and view all the answers

What is one practical problematic area associated with the right of preemption remedy as discussed in the textbook?

Complexity in execution Signup and view all the answers

How can a grantee stop the conclusion of a contract or sale of property if the grantor violates a preference contract?

Seek an interdict Signup and view all the answers