Option contract - Wikipedia

Option agreement is

Insights What are the benefits of an option agreement in a land purchase?

Typically, your next step is to consider something called an Option Agreement. An Option Agreement is simply a contract between the original owner of a specific work e.

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The purpose of the Option Agreement is to give the purchaser the exclusive ability option to purchase the rights in the work during a limited time. An Option Agreement typically includes a set purchase price to be paid to the owner should the purchaser exercise its option.

Independent Movie Tip: Screenplay Option Agreements

But why would a producer want an option to purchase the rights, instead of purchasing them outright in the first place? Well, before purchasing the rights of a creative work, an Option Agreement gives the producer a set amount of time to secure financing, develop the project, and determine whether it is something they want to pursue i.

This can also be beneficial to the option agreement is, because if the purchaser never exercises the option, no rights or ownership interest is ever transferred.

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Here is a basic, non-exhaustive, list of some crucial provisions that should be included in any well-drafted Option Agreement.

Remember, as with any deal, all terms can be negotiated between the parties.

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Option Fee: This is the only guaranteed money the owner will receive. Option Period: The exclusive period of time the purchaser has to exercise the option. Purchase Price: The larger payment due to owner if the purchaser exercises the option decides to buy.

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Applicability of Option Fees against Purchase Price: In some cases, the option fees are applicable against the purchase price; this means these fees can be deducted from the Purchase Price upon exercise of the option. Set-Up Bonus: An additional fee paid to the owner if the purchaser enters into an agreement, for the development or production of the work, with a third party.

Contingent Compensation: The owner will normally request profit participation. Credit: If the production is non-guild, or if the optioned property is not a screenplay e. Reversion: The owner may typically demand the right to reacquire the property, if the purchaser exercises the option but fails to produce it within a period option agreement is time typically years after the option is exercised.

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Consultation: The owner may be paid additional fees to provide consulting services advice during production. What is your experience with Option Agreements?

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By using this Blog you understand that there is no attorney client relationship between you and Romano Law PLLC or any individual contributor. You should consult a licensed professional attorney for individual advice regarding your own situation.

What is an option agreement? Napthens - August 9th With a growing number of landowners across the region marketing their land for development, option agreements are growing in popularity as a method of structuring deals and harvesting interest from potential developers. We explore some key issues in relation to options.