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 paying consideration to keep an offer open creates an enforceable option contract. Because the brother paid $200 to keep the tractor offer open for six months, an enforceable option contract was formed on May 15. That option bindingly prevents revocation by the farmer (or his estate) during the option period, and it survives the farmer’s death. The brother could exercise the option within the six-month window, making the option enforceable. The other statements misread the effect of death on an option contract or treat the payment as the sole basis for enforceability, whereas the important point is the valid option contract formed on May 15 and its binding status despite the farmer’s death.