The Option Agreement Contract serves as a crucial legal instrument in Nigerian business transactions, providing a structured framework for future dealings while managing risk and opportunity. This document is particularly valuable when parties wish to secure future rights without immediate commitment to the full transaction. The agreement must comply with Nigerian legal requirements, including relevant provisions of the Companies and Allied Matters Act 2020, Investments and Securities Act 2007, and where applicable, sector-specific regulations. It's commonly used in various contexts including real estate transactions, corporate acquisitions, resource exploration rights, and financial instruments. The Option Agreement Contract typically includes detailed terms about the option's exercise, pricing mechanisms, conditions precedent, and completion requirements, all tailored to meet Nigerian legal standards and business practices.

1. Parties: Identifies and defines all parties to the agreement, including their full legal names, addresses, and registration details if companies

2. Background: Sets out the context and purpose of the option agreement, including brief description of the subject matter

3. Definitions and Interpretation: Defines key terms used throughout the agreement and establishes rules of interpretation

4. Grant of Option: Details the specific option being granted, including its nature and scope

5. Option Period: Specifies the duration of the option and any conditions affecting its term

6. Option Price: States the consideration paid for the option itself (if any)

7. Exercise of Option: Details the process and requirements for exercising the option, including notice requirements

8. Strike Price: Specifies the price or consideration payable upon exercise of the option

9. Completion: Sets out the completion process once the option is exercised

10. Representations and Warranties: Contains statements of fact and promises made by each party

11. Covenants: Details ongoing obligations of the parties during the option period

12. Assignment and Transfer: Governs the transferability of the option rights

13. Termination: Specifies circumstances under which the agreement can be terminated

14. Governing Law and Jurisdiction: Specifies Nigerian law as governing law and establishes jurisdiction for disputes

15. Notices: Details how formal communications between parties should be made

16. General Provisions: Contains standard boilerplate clauses including severability, entire agreement, and amendments