A farmer offered his tractor to his brother for purchase and kept the option open for six months in exchange for $200; The farmer dies before the option is exercised, but the brother later exercises the option within six months. Which statement is correct?

• A. The option is enforceable because the brother made an enforceable option contract on May 15.
• B. No, because at the time of the farmer's death, the tractor went to the estate.
• C. No, because the offer terminated on July 1.
• D. The option is enforceable because the brother paid $200 to keep the option open.

Answer: (A)

The key idea is that an option contract creates a binding promise to keep an offer open for a set period, and it is supported by consideration. Here, paying $200 in exchange for six months’ access to purchase the tractor makes a separate contract to keep the offer open. Because that option contract was formed on May 15, it binds the parties for six months, independent of the underlying sale.

The farmer’s death does not automatically cancel that option. An option contract can survive the offeror’s death because the offeree has already provided consideration to keep the offer open, and the option is a distinct, enforceable agreement. Since the brother exercised within the six-month window, the option is enforceable.

The other statements are less accurate because they either rely on the absence of an option contract or treat death as terminating the open offer without recognizing the enforceable option created by the consideration.