Options affecting the binding nature of the contract
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| Options affecting the binding nature of the contract |
- In binding contracts which are liable to be cancelled it shall be permissible for the contracting parties or either of them to make it a condition in the contract or thereafter that he should enjoy the benefit of the option of conditionality in his own or another's favour for such period as may be agreed between the parties, and if they do not agree on a particular period, it shall be permissible for the judge to specify that period in accordance with custom.
- The person having the benefit of the option of conditionality shall have the right to cancel or to affirm the contract.
- If he elects to confirm the contract, it shall become binding with retroactive effect to the date on which it was made, and if he elects to cancel it, the contract shall be cancelled and deemed void ab initio.
- If both of the contracting parties have the advantage of the option of conditionality and one of them elects to cancel the contract, the contract shall.
- be cancelled notwithstanding that the other may have affirmed, and if one affirms the contract the other shall retain his option to cancel throughout the period laid down for the option.
- Cancellation or affirmation may take place by any act or word indicating the same, whether expressly or by implication.
- If the period expires without the option to cancel or to affirm being exercised, the contract shall become binding.
- In order for the cancellation to be valid, the option in that behalf must have been exercised within the period there of and the other party notified there of if the cancellation is effected by words and is not dependent on mutual consent or an order of the court.
- With regard to affirmation, it is not a requirement (of the contract becoming binding) that the other party should know of it.
- The option shall lapse upon the death of the person entitled to exercise it during the period thereof. The contract shall become binding with regard to his heirs, and the other party shall retain his option, if he originally had an option, until the expiry of the period thereof
