What is contract of option?
ART. 1324. When the offerer has allowed the offeree a certain period to accept, the offer may be withdrawn at any time before acceptance by communicating such withdrawal, except when the option is founded upon a consideration, as something paid or promised. (n)
width="0%" Option contract is a preparatory contract giving a person for a
consideration a certain period and under specified conditions within
which to accept the offer of the offerer.[1] It is a separate agreement distinct from the contract which the parties may enter into upon the consummation of the option.[2] Moreover, if the option contract is with consideration, the offeror cannot unilaterally withdraw his offer. If it is without consideration, the offeror may withdraw by communicating withdrawal to the offeree before acceptance.
The pertinent provision provides the general rule regarding offer and acceptance: when the offerer gives to the offeree a certain period to accept, "the offer may be withdrawn at any time before acceptance" except when the option is founded upon consideration. However, Article 1479 of the Civil Code modifies the general rule, which applies to "a promise to buy and sell" specifically. This rule requires that a promise to sell to be valid and binding must be supported by a consideration distinct from the price. Otherwise, the option can still be withdrawn, even if accepted.[3]
[1] De Leon. Obligations and Contracts.
[2] Carceller v. CA, 302 SCRA 718,724 (1999).
[3] Tuazon v. Del Rosario-Suarez, G.R. No. 168325 (2010).