Option To Buy Contract Template for Philippines

The Option To Buy Contract is a crucial legal instrument in Philippine business and property transactions, providing a structured framework for potential purchase arrangements while minimizing risk for both parties. This document is typically used when a potential buyer needs time to arrange financing, conduct due diligence, or evaluate the viability of a purchase, while the seller wants to secure a committed potential buyer. The contract, governed by Philippine civil law, specifies the option consideration, purchase price, option period, and exercise mechanisms. It's particularly valuable in real estate transactions, business acquisitions, and asset purchases where parties need a formal commitment period before finalizing a sale. The document must comply with Philippine documentation requirements, including proper notarization and registration where applicable, and may need to address specific local regulations depending on the subject matter of the option.

1. Parties: Identifies and provides full details of the Option Grantor and Option Holder, including their legal capacity to enter into the contract

2. Background: Explains the context of the agreement and the parties' intention to enter into an option arrangement

3. Definitions: Defines key terms used throughout the contract for clarity and consistency

4. Subject Matter: Detailed description of the property or item subject to the option to buy

5. Option Grant: Explicit statement of the grant of option and its basic terms

6. Option Period: Specifies the duration of the option and any conditions affecting the period

7. Option Price: States the amount to be paid for the option right itself

8. Purchase Price: Specifies the agreed purchase price for the subject matter if the option is exercised

9. Exercise of Option: Details the procedure and requirements for exercising the option

10. Payment Terms: Outlines the payment schedule and methods for both the option price and purchase price

11. Representations and Warranties: States the parties' assurances regarding their capacity and the subject matter

12. Rights and Obligations: Details the specific rights and obligations of both parties during the option period

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

14. Governing Law: Confirms Philippine law as the governing law and jurisdiction for disputes

15. Execution: Formal closing section with signature blocks and notarization requirements