An option to purchase can be a difficult form to write However, with some small guidelines you can write a legal option to purchase business form. If you want an example of a complete Option purchase form instead of the guide, it is recommended checking out the resource box. This article can help you reduce contract administration fees if you are an individual or small business. It is recommended to check your copy with a lawyer to prevent legal hassle afterwards.
Step 1: Make clear who is being referred to as the seller and as the Option holder. This is crucial, since it make absolutely, 100% waterproof who is which party. An example would be: “In this agreement, name1 is being referred to as the selling party. Name2 is being referred to as the option holder.”
Step 2: Make clear how much money the option costs and include that it is being paid by the option holder. Also make sure to note how the amount has to be paid (periodically via PayPal or wiretransfer) After that make sure to include your business address (or individual address) and include trademark information and bank account number.
Step 3: Explain in which condition the contract has been setup (without broker, legal entities or agents).
Step 4: Include when the contract is valid and when it isn’t. Also take external conditions like fire into accounts.
Step 5: Include what the option holder is entitled to buy and include the agreements of those products/services. This is very important to write down due to accountability.
Step 6: Make sure to list the date and leave space for the signature of the selling party and the option holder.
an example of a good option to purchase form:
Option to Purchase
_____________, referred to as SELLER, and _______________, referred to as OPTION HOLDER, agree:
In consideration of $____ (_______________&___/100 dollars), paid by OPTION HOLDER to SELLER, the receipt of which is acknowledged, the SELLER grants to OPTION HOLDER, the exclusive option to acquire the following business: ___________, located at __________________ for a period of ________ months.
Should the OPTION HOLDER exercise the option, the following assets will be conveyed to OPTION HOLDER by SELLER:
business located at above address, with all inventory and trade names.
OPTION HOLDER may exercise the option by written notice to SELLER, specifying a date for closing which shall be no more than _______ after the notice of intention to exercise.
The option price shall be $ ___ (____________________ & ___/100 dollars) payable as follows:
_______________________________________________________________
If, prior to exercise of the option, or during the period between notice of intention to close and closing, any part of the business shall be destroyed or damaged by fire, theft or other peril, the option price shall be reduced in a sum sufficient to compensate OPTION HOLDER for the loss. In the event that there are insurance proceeds to reconstruct the loss and provide for business interruption loss, and SELLER assigns the same to OPTION HOLDER, or SELLER reconstructs the same prior to closing, no abatement of purchase price shall occur.
During the term of the option, the SELLER shall carry on the business in the usual and ordinary manner up to and including the closing date of the sale, and will not enter into any agreements not in the ordinary course of its business. Further, SELLER shall not enter into any unusual agreements or make unusual commitments affecting the operation of the business, without prior approval of OPTION HOLDER.
In no event shall OPTION HOLDER cancel, alter or amend its obligations under the following agreements, nor shall it fail to perform the obligations related to the following agreements:
If OPTION HOLDER exercises its right to purchase, then ____ per cent of the option price shall be applied towards the purchase price.
The parties have negotiated this agreement between themselves, and there are no brokers or agents entitled to compensation. In the event that any brokers or agents seek compensation herein, the parties shall each indemnify the other from any damage, expense including counsel fees, which either may suffer as a result of the claim of a broker or agent, and the party who is determined to have breached this representation shall be responsible for payment of indemnity and the obligation to the broker or other agent.
This writing accurately sets forth the agreement between the parties and this agreement may only be amended in writing signed by both parties.
Dated: ________________________
_____________________________________________________
Seller
_____________________________________________________
Option Holder
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