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An Option to Buy Agreement is a strategic legal instrument used in New Zealand property transactions where a potential buyer seeks to secure the right to purchase a property without immediate commitment to the full purchase. This document is particularly useful in situations where buyers need time to arrange financing, conduct due diligence, or obtain necessary approvals before committing to the purchase. The agreement includes essential details such as the option fee, exercise period, purchase price, and property specifications, all structured within the framework of New Zealand property and contract law. It provides protection for both the option grantor and holder while establishing clear procedures for exercising the option and completing the subsequent property transfer. This type of agreement is commonly used in commercial property developments, land banking arrangements, and strategic property acquisitions where timing and certainty are crucial factors.

1. Parties: Identifies and provides full legal details of all parties to the agreement, including the Option Grantor (seller) and Option Holder (potential buyer)

2. Background: Sets out the context of the agreement, including the property owner's willingness to grant an option and the potential buyer's interest in acquiring the option

3. Definitions and Interpretation: Defines key terms used throughout the agreement and establishes rules for interpreting the document

4. Grant of Option: Explicitly states the granting of the option and its basic terms, including the option period and any conditions precedent

5. Option Fee: Specifies the amount of the option fee, payment terms, and whether it's refundable or will be applied to the purchase price

6. Exercise of Option: Details the process and requirements for exercising the option, including notice requirements and timing

7. Purchase Price: States the agreed purchase price for the property if the option is exercised

8. Property Details: Provides complete legal description and details of the property subject to the option

9. Warranties and Representations: Contains warranties from both parties, particularly the seller's warranties about the property's title and condition

10. Default and Termination: Specifies what constitutes default and the consequences of default by either party

11. General Provisions: Contains standard clauses including governing law, notices, entire agreement, and amendment procedures