Call Option Contract Template for England and Wales

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Key Requirements PROMPT example:

Call Option Contract

I need a Call Option Contract under English law for a 12-month option to purchase 25% of shares in my technology startup, with an exercise price of £500,000 and an expiry date of 30 June 2025, including anti-dilution provisions and drag-along rights.

Document background
A Call Option Contract is a sophisticated legal instrument commonly used in business and investment transactions under English and Welsh law. This contract type is essential for parties seeking to secure future purchase rights while maintaining flexibility. It establishes the framework for a potential future transaction, defining critical elements such as pricing, timing, and execution procedures. The document is particularly relevant in scenarios involving share acquisitions, property transactions, or strategic business arrangements, where parties need to balance certainty with optionality in their commercial relationships.
Suggested Sections

1. Parties: Identification of the option holder and option grantor with full legal names and addresses

2. Background: Context of the option agreement and brief description of the underlying asset

3. Definitions: Key terms including 'Option Period', 'Strike Price', 'Underlying Asset', 'Exercise Notice'

4. Grant of Option: Core terms of the option grant including duration and exercise price

5. Exercise Procedure: Detailed process for exercising the option including notice requirements

6. Completion: Process following exercise including payment and transfer mechanisms

7. Representations and Warranties: Standard warranties regarding capacity and authority

Optional Sections

1. Transfer Restrictions: Restrictions on transferring the option rights (used when parties want to limit assignability)

2. Early Termination: Circumstances allowing early termination (used when specific trigger events are required)

3. Anti-dilution Provisions: Protections against share dilution (used when option relates to company shares)

Suggested Schedules

1. Form of Exercise Notice: Template notice for exercising the option

2. Description of Underlying Asset: Detailed description of the asset subject to the option

3. Valuation Methodology: If applicable, agreed methods for valuing the underlying asset

4. Regulatory Approvals: List of required regulatory approvals if applicable

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Industries

Financial Services and Markets Act 2000: Primary legislation governing financial services and markets in the UK, including regulations for financial instruments like options

Companies Act 2006: Key legislation for company law matters, particularly relevant if the call option relates to company shares

Consumer Rights Act 2015: Legislation protecting consumer rights, applicable if one party to the option contract is a consumer

Law of Property (Miscellaneous Provisions) Act 1989: Governs formalities for creation of contracts relating to land and property interests

Common Law Contract Principles: Fundamental principles governing contract formation, including offer, acceptance, consideration, and intention to create legal relations

Financial Services and Markets Act 2000 (Regulated Activities) Order 2001: Specifies which activities require FCA authorization and regulation

MiFID II Requirements: European regulations governing financial instruments and markets, still relevant in UK law post-Brexit

FCA Regulations: Financial Conduct Authority guidelines and regulations for financial instruments and markets

Law of Property Act 1925: Fundamental property law legislation, relevant if the option relates to real estate

Land Registration Act 2002: Governs the registration of interests in land, relevant for property-related options

Capital Gains Tax Legislation: Tax regulations governing gains made from exercising options

Stamp Duty Regulations: Tax regulations concerning stamp duty on option agreements and transfers

Rome I Regulation: EU regulation determining applicable law in international contracts, retained in UK law post-Brexit

Brussels I Regulation (recast): Regulation concerning jurisdiction in international matters, retained in UK law post-Brexit

Rule Against Perpetuities: Common law rule limiting the duration for which future interests can be created

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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