What is an exercise of option?

An exercise of option is an important legal concept related to property law in Massachusetts. This concept applies when a buyer and a seller have reached an agreement whereby the buyer can exercise the right to buy the property in the future. For example, a seller might give a buyer an option to purchase an item, such as a house, at a later date. The buyer is then allowed to “exercise” this option. The buyer then pays the seller the amount stipulated in the option agreement and the item is sold to the buyer. Exercising an option is different from entering into a lease, as the buyer is actually purchasing the property instead of simply renting it. As such, the seller is no longer the owner of the property. The buyer now has the legal right to do whatever they wish with the item that they purchased, such as remodeling or flipping it. Option agreements are legally binding, as both parties enter into them willingly and knowingly. In Massachusetts, any breach of the option agreement can result in legal action against the party responsible for the breach. Therefore, it is important for both parties to fully understand the terms of an option exercise before signing any contracts.

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