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An Option Contract Is Formed When an Offeree Prevents the Offeror

question 86

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An option contract is formed when an offeree prevents the offeror form revoking his or her offer by paying the offeror compensation to keep the offer open for an agreed-upon period of time.


Definitions:

Subsidiaries

Companies that are controlled by another company, known as the parent company, through the ownership of more than half of their voting stock or through other control mechanisms.

Directors

Individuals appointed or elected to oversee the management and make strategic and policy decisions for a corporation or organization.

Key Management Personnel

Individuals who have authority and responsibility for planning, directing, and controlling the activities of an entity, typically including the company’s directors and senior executives.

Significant Influence

The power to participate in the financial and operating policy decisions of an entity but is not control or joint control over those policies.

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