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Legal Memorandum: Valid Option Agreement and Valuable Consideration

Issue: Under the laws of the state of Minnesota, must a party give valuable consideration for an option agreement to be valid?

Area of Law: Business Organizations & Contracts
Keywords: Valid Option Agreement; Valuable Consideration
Jurisdiction: Minnesota
Cited Cases: None
Cited Statutes: Restatement (Second) of Contracts § 87; Minn. Stat. § 336.2-205
Date: 02/01/2001

Valuable consideration actually given is not the only means by which an option becomes valid.  An option becomes binding if any of the following is true:  (1) consideration is received for it, or (2) detrimental reliance by the buyer occurs and was foreseeable by the Seller, or (3) a statutory "firm offer" is made.*FN1  Restatement (Second) of Contracts § 87 (1981). 

FOOTNOTES

*FN1i.e., under Minn. Stat. § 336.2-205 (1996).

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