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: comparative validity and enforceability across China, England and Wales, France, Germany, Hong Kong, India, Italy, Japan, Malaysia, Russia, Singapore, Spain, UAE and the United States

Published by a LexisNexis Arbitration expert

Practice notes

This Practice Note reviews how unilateral Option clauses are dealt with across these jurisdictions: China, England and Wales, France, Germany, Hong Kong, India, Italy, Japan, Malaysia, Russia, Singapore, Spain, the UAE and the United States of America. It should be considered alongside the Practice Notes, Unilateral option clauses—an introduction, and Types of Dispute resolution clauses—litigation, mediation, multi‑tier, hybrid and carve‑out clauses. Note: LexisNexis® UK does not report every international judgment.

China

The position under Chinese law remains uncertain, and the judicial stance remains unsettled at present. Article 16 of the 1994 Arbitration Law of the People’s Republic of China stipulates that an arbitration agreement must, inter alia and among other matters, express the parties’ intention to submit to arbitration to resolve disputes. Accordingly, there is apprehension that Chinese courts may refuse to uphold unilateral option clauses, on the footing that they do not embody the necessary mutual intention to arbitrate disputes in practice. Case law is sparse; however, in 1999 the Beijing Higher People’s Court indicated a unilateral option clause was invalid, characterising such provisions within that ruling as 'unconscionable' or 'unfair'...

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Web page updated on 22/05/2026

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