Jurisdiction(s):
United Kingdom

Key definition

Option definition

What does Option mean? An option is a contractual right (but not an obligation) to buy (a call) or sell (a put) specified property, shares or other assets at an agreed or formula-based price (the exercise price), exercisable on a fixed date or within a defined exercise period. The grantor must keep the offer open; the holder may elect to exercise. The term is descriptive and used across commercial contracts, real estate (options to purchase, overage), corporate/share options and financial derivatives. Its content is shaped mainly by contract and property case law, with statutory formalities where land is involved. Key features include: consideration or a premium...

Unilateral option clauses: choosing arbitration or litigation—comparative enforceability, key pitfalls, and drafting and practical guidance

Published by a LexisNexis Arbitration expert

Practice notes

Unilateral Option clauses defined

Unilateral option clauses are Dispute resolution provisions in contracts that confer on a single party, or a subset of parties (but not everyone), the ability to choose between arbitration or court proceedings to settle a dispute. They are also known as one-sided, non‑mutual, asymmetrical or sole option clauses. Such a clause affords the freedom to pick the dispute resolution mechanism best suited to the circumstances of the matter. They appear frequently in finance agreements, where a lender aims to preserve flexibility to recover sums due and otherwise uphold its rights against a buyer who has failed to meet its obligations. Unilateral option clauses sit within the family of hybrid dispute resolution clauses—see Practice Note: Types of dispute resolution clauses—litigation, mediation, multi‑tier, hybrid and carve‑out clauses for further detail. Note: judgments from non‑UK jurisdictions mentioned in this Practice Note are not reported by LexisNexis® UK.

Why provide a unilateral option to arbitrate or litigate?

There are many reasons a party, such as a lender, might favour arbitration over litigation as the route for resolving disputes, and the reverse may apply; however, the option can be unclear when the clause is drafted...

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Web page updated on 22/05/2026

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