In an option contract, who is bound by the agreement?

In an option contract, the optionor is the party who grants the option to the optionee, allowing the optionee the right, but not the obligation, to purchase or sell a property at a predetermined price within a specified time frame. The optionor is bound by the terms of the contract to adhere to the agreement, which means they cannot unilaterally change the terms or refuse to sell if the optionee decides to exercise their option within the designated period.

The optionee holds the right to execute the option but is not obligated to do so. Thus, the terms of the contract specifically impose a commitment on the optionor, ensuring that they must fulfill their part of the agreement if the optionee decides to proceed. This structure creates a form of security for the optionee, as they can lock in terms without the pressure of immediate execution, while the optionor is bound to the deal as long as it remains unexercised.