In an option contract, which statement best describes its essential characteristic?

• A. It transfers title today
• B. It creates a tenancy at will
• C. It obligates the seller to repurchase the property
• D. It gives the buyer the exclusive right to purchase within a period for a specified price

Answer: (D)

The key idea is that an option contract gives the buyer an exclusive right to buy the property within a set time for a stated price. This means no title transfers today, and the buyer isn’t obligated to purchase. If the buyer chooses to exercise the option, the seller must sell at the agreed price. The arrangement isn’t a lease, so it doesn’t create tenancy, and it isn’t a requirement for the seller to repurchase the property—that would be a different type of buyback clause. The option simply grants that limited, time‑bound right to buy at the predetermined price, in exchange for some consideration.