Fixed Price Purchase Option
A fixed price purchase option generally applies to a lease agreement such as in domain leasing. A bargain price purchase option is a type of fixed price purchase option.
In this arrangement, at the end of the lease term, the lessee has the option to purchase the domain name at an agreed-upon fixed price which could be higher than, lower than, or equal to its current fair market value.
The lessee may have invested time and money in the domain name. The purchase option gives the lessee the incentive to purchase it outright at the end of the lease term at a predetermined price. If the value of the domain name increases significantly during the life of the lease agreement, then the fixed price could turn out to be a bargain price for the lessee.
Author: Kris Tabetando
Kris Tabetando provides mergers & acquisitions (M&A) advisory and brokerage services to Internet companies. He also partners with investors to acquire & manage Internet businesses.
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