95. A tenant has an option to purchase leased property. The price that the tenant will pay for the property is determined by the
Answer: A
The price that the tenant will pay for the property is determined by the terms specified in the option.
The price that the tenant will pay for the property is outlined in the terms specified in the option agreement. This means that the price is predetermined and agreed upon before the option is exercised.
A) terms specified in the option.
This option is correct because the purchase price is explicitly defined in the option agreement. The terms set forth in the option provide clarity and certainty regarding the financial obligation of the tenant should they choose to purchase the property.
B) agreement, when the option is exercised.
This option is incorrect as it suggests that the price is negotiated or decided at the time the option is exercised. In reality, the purchase price is established in advance within the option agreement, not left to be determined at a later date.
C) property's market value at the time of exercising the option.
This option is also incorrect because it implies that the price will fluctuate based on the market value at the time of exercise. However, the price is fixed according to the terms of the option, which does not change with market conditions.
D) tenant, when the option is exercised.
This option is incorrect because it implies that the tenant has the discretion to set the price at the time of exercising the option. The purchase price is predetermined in the option terms, removing any uncertainty regarding the amount due upon exercise.
Conclusion
The correct answer is definitively right because it aligns with the fundamental principle that an option agreement specifies terms, including the purchase price, that must be adhered to. All other options fail to recognize that the price is established beforehand and does not depend on fluctuating market conditions or negotiations at the time of exercise.