Call option agreement Template for the UK
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What is a Call option agreement?
A call option agreement gives one party (the grantee) the right, but not the obligation, to buy specific assets, such as shares or property, at a pre-agreed exercise price within a set period. The grantor is bound to sell if the grantee exercises. A call option agreement template sets out the exercise price, the option period, the assets covered, and how the option is exercised, so both parties know exactly where they stand.
Under the law of England & Wales, a call option must clearly state the exercise price, the timeframe, and the exact assets covered to be enforceable. It becomes legally binding once properly executed, and courts will generally uphold it where both parties have followed proper contractual procedures. UK businesses use these agreements to secure future purchasing rights, whether for strategic acquisitions, real estate and home purchases, or purchasing shares as part of corporate restructuring, without committing to buy today. Whether the right is ever taken up rests with the grantee.
You can determine the value of the underlying asset by fixing the exercise price now or by setting a valuation method to be applied at exercise. GenieAI drafts a call option agreement tailored to your rules and context, with red, amber and green risk flags against your own playbook, so the wording is accurate and consistent before you sign. Every clause is checked with legal specialist accuracy, not the guesswork of a general-purpose chatbot.
Sample clauses: standard wording in a UK call option agreement
3. Grant and Exercise of the Option
3.1 In consideration of the sum of £[1] paid by the Grantee to the Grantor on the date of this agreement (receipt of which the Grantor acknowledges), the Grantor grants to the Grantee an option to require the Grantor to sell the Option Shares to the Grantee at the Exercise Price, on the terms of this agreement.
3.2 The Grantee may exercise the Option once only, in respect of all (and not some only) of the Option Shares, by serving a duly completed Option Notice in the form set out in Schedule [1] on the Grantor at any time during the Option Period.
3.3 An Option Notice, once served, is irrevocable and unconditional, and on service a binding contract for the sale and purchase of the Option Shares at the Exercise Price arises between the Grantor and the Grantee on the terms of this agreement.
3.4 If the Option is not exercised in accordance with clause 3.2 before the end of the Option Period it lapses automatically and the Grantee has no further rights under this agreement, save in respect of any prior breach.
4. Completion
4.1 Completion shall take place at [location or remotely by exchange of documents] on the date falling [10] Business Days after service of the Option Notice, or on such other date as the parties agree in writing.
4.2 At Completion the Grantor shall deliver to the Grantee a duly executed stock transfer form in respect of the Option Shares, the relevant share certificate (or an indemnity in agreed form for any lost certificate), and evidence that any pre-emption rights in the articles of association have been waived or disapplied.
4.3 At Completion the Grantee shall pay the Exercise Price to the Grantor by electronic transfer to the account notified under clause [4.2], and shall be responsible for any stamp duty payable on the transfer.
4.4 If either party fails to comply with clause 4.2 or 4.3, the other party may, without prejudice to its other rights, defer Completion by up to [20] Business Days or proceed to Completion so far as practicable and claim damages.
Illustrative extract showing typical drafting under the law of England and Wales. Documents generated with GenieAI are tailored to your rules, standards and context.
Frequently Asked Questions
When should you use a Call option agreement?
Use a Call option agreement when you need to secure the right to buy specific assets in the future while maintaining flexibility. This proves especially valuable during business acquisitions where you want to lock in purchase terms for company shares but need time to arrange financing or complete due diligence.
These agreements work well for property developers securing future land purchases, startups planning staged investments, and companies structuring employee share schemes. The key timing is before any major transaction where you need guaranteed purchase rights without immediate commitment. Having this agreement in place protects your interests and provides clarity for all parties involved.
What are the different types of Call option agreement?
- Call Option Contract: Basic agreement granting the right to buy assets at a fixed price, commonly used for straightforward transactions
- Call Option Shareholders Agreement: Specifically designed for share purchases, including detailed provisions about company ownership and voting rights
- Put And Call Agreement: Combines both buying and selling rights, offering maximum flexibility for both parties
- Put And Call Option Deed: More formal version executed as a deed, providing additional legal protection and longer limitation periods
Who should typically use a Call option agreement?
- Business Buyers: Companies or individuals seeking to secure future purchase rights for assets, shares, or property at predetermined prices
- Corporate Sellers: Businesses offering future sale rights to strategic partners or investors while maintaining current ownership
- Legal Advisers: Solicitors and corporate lawyers who draft and review Call option agreements to ensure enforceability and protect client interests
- Company Directors: Key decision-makers who negotiate and approve option terms, often requiring board approval
- Financial Advisers: Professionals who help structure option pricing and advise on tax implications of different exercise scenarios
How do you write a Call option agreement?
- Asset details: Gather precise descriptions of the shares, property or assets covered, including current valuations and how you will determine value at exercise
- Exercise terms: Define the exercise price, the option period, and any conditions that trigger or restrict the right to buy
- Party information: Collect full legal names, addresses, and company registration details for every party involved
- Obligations and completion: Set out what each side must do on exercise, including delivery of a stock transfer form and payment of the exercise price
- Execution plan: Confirm signing requirements and proper authority from both sides, whether signed as a simple contract or as a deed
- Documentation: GenieAI generates a call option agreement tailored to your context, checking each clause against your playbook so the terms are accurate and consistent before signing
What should be included in a Call option agreement?
- Option terms: Clear specification of the exercise price, duration, and the conditions for exercising the right to buy
- Asset description: Detailed identification of the shares, property or assets subject to the option, and how their value is set or determined
- Party details: Full legal names and addresses of all parties, including registration numbers for companies
- Exercise mechanics: The precise procedure for exercising the option, including notice requirements and the obligations that follow
- Completion terms: Timeline and process for completing the sale once the option is exercised
- Confidentiality and privacy: Provisions protecting commercially sensitive information, along with a privacy policy for how each party handles the other's data and the details of the underlying deal
- Governing law: An explicit statement that the law of England & Wales governs the agreement
- Execution block: Proper signature sections with witness provisions if the agreement is executed as a deed
What's the difference between a call option and a put option?
A call option agreement grants only the right to buy, while a standard option agreement can cover both purchase and sale rights. Whether you need one or the other depends on the deal. The table below sets out the main differences under the law of England & Wales.
| Feature | Call option agreement | Standard option agreement |
|---|---|---|
| Directionality | Right to buy only, giving focused protection for the buyer | Can cover purchase and sale rights, offering broader flexibility |
| Price structure | Often a premium is paid upfront to secure the future right to buy; the exercise price may be fixed or determined at exercise | May not involve an initial payment; value can be set later |
| Exercise terms | Usually specific exercise conditions and timeframes, suited to targeted acquisitions such as purchasing shares | Broader terms depending on whether the right is to buy, sell, or both |
| Legal framework | Enforced under contract law, with additional regulatory considerations where financial instruments are involved | Operates under general contract law principles |
The other side of the coin is a put option. A call option gives the grantee the right to buy, whereas a put option gives the holder the right to sell an asset at an agreed price. Many deals combine the two in a put and call agreement, so one party can compel a purchase and the other can compel a sale within set terms and conditions.
If you are unsure which fits, GenieAI can review your position and draft the right document, with each clause checked against your playbook.
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Source: GenieAI internal data Updated 6 hours ago
About the Call option agreement
- Asset details: Gather precise descriptions of the shares, property or assets covered, including current valuations and how you will determine value at exercise
- Exercise terms: Define the exercise price, the option period, and any conditions that trigger or restrict the right to buy
- Party information: Collect full legal names, addresses, and company registration details for every party involved
- Obligations and completion: Set out what each side must do on exercise, including delivery of a stock transfer form and payment of the exercise price
- Execution plan: Confirm signing requirements and proper authority from both sides, whether signed as a simple contract or as a deed
- Documentation: GenieAI generates a call option agreement tailored to your context, checking each clause against your playbook so the terms are accurate and consistent before signing
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