An option contract to hold an offer open is terminated by impracticability when the subject matter is destroyed through no fault of the offeror. Which statement is correct?

• A. Yes, the buyer could demand a similar car.
• B. No, the option contract's duty to hold the offer open is discharged by impracticability.
• C. Only if the buyer immediately accepts the option.
• D. The seller must replace.

Answer: (B)

The key idea is that impracticability can discharge duties when the subject matter of a contract is destroyed through no fault of the promisor. An option contract to hold an offer open creates a promise to keep the offer available for a set time. If the specific item the offer pertains to is destroyed, there’s no subject matter left to buy, so the option cannot be exercised and the promisor’s duty to keep the offer open is discharged by impracticability.

That’s why the correct statement is that the option contract’s duty to hold the offer open is discharged when the car is destroyed. The offeree cannot demand a replacement or substitute car, and there’s no requirement that the seller replace the destroyed item. Immediate acceptance isn’t the remedy either, because destruction ends the possibility of the offer being exercised at all.

In short, destruction of the subject matter through no fault of the offeror ends the option to hold the offer open, freeing both parties from that duty.