Jurisdiction(s):
United Kingdom

Key definition

Options definition

What does Options mean? In legal practice, an option is a contractual right, not an obligation, to buy (a call) or sell (a put) an identified underlying (for example shares, commodities or currency) at an agreed strike price either on the expiry date (European-style) or at any time up to expiry (American-style). The holder pays an option premium for this right; key terms include the underlying and quantity, strike, expiry and the settlement method (physical delivery or cash settlement). Options are used to hedge risk, obtain price protection or leverage exposure, and are fundamental in derivatives, corporate finance and remuneration structures. The term is...

Break clauses in Scottish commercial leases: exercise, timing, conditions (rent, covenants, vacant possession), effects on sub-leases, VAT and inter naturalia, with practical drafting tips

Published by a LexisNexis Property expert

Practice notes

A fixed-term lease can include a mechanism allowing the parties, or just one of them, to end the tenancy before the stated expiry. This is commonly called a break option or break clause. Prospective tenants frequently decline to enter a lease from the outset unless they are granted the ability to exit early. Landlords typically consent, albeit hesitantly, to such a break (often timed to coincide with a Rent Review) in order to secure the deal or letting, while hoping the tenant will not use it, or that the attempt will fail on a procedural point about notice Timing or for not meeting conditions tied to its exercise.

Who may exercise the break?

Where the lease does not specify who can operate the break option, either party may do so, because the lease is a bilateral contract. In day-to-day practice, most leases spell out clearly whether the break can be used by the landlord, by the tenant, or whether the right is mutual to both parties...

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Kenneth S Gerber

Mitchells Roberton

Ken joined Mitchells Roberton in 2019. He was previously a partner for 12 years at Anderson Strathern, and before that he was a partner at Kidstons.Ken handles landlord and tenant law, site assembly, property development, property financing, property purchase and sale and the property aspects of corporate transactions.He is accredited by the Law Society of Scotland as a specialist in commercial leasing law. He regularly speaks on a range of commercial property subjects at conferences for MBL Seminars, as well as for other providers, and has presented online lectures for The Law Society of Scotland and University of Glasgow. Kenneth wrote the course on commercial conveyancing for the postgraduate Law Diploma at Glasgow University, and is senior tutor on that course. He also regularly provides specialist legal opinions to other firms on commercial lease matters....

Web page updated on 21/05/2026

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