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Call option agreement
"I need a call option agreement for an investment allowing the purchase of 1,000 shares at $50 per share, exercisable within 18 months, with a premium of $5 per share."
What is a Call option agreement?
A Call option agreement gives you the right to buy specific assets, like company shares or real estate, at a pre-set price within an agreed timeframe in Saudi Arabia. It's particularly useful in commercial transactions where buyers need flexibility and sellers want to secure potential deals.
Under Saudi commercial law, these agreements must clearly state the exercise price, expiration date, and asset details. They're commonly used in real estate development, corporate acquisitions, and investment deals across the Kingdom. When properly structured, Call options offer strategic advantages while staying compliant with Shariah principles and local regulations.
When should you use a Call option agreement?
Consider using a Call option agreement when you need guaranteed access to buy specific assets in the future while maintaining financial flexibility now. This structure works especially well in Saudi real estate developments where you want to secure prime locations before prices rise, or in business acquisitions when you need time to arrange financing.
These agreements become valuable during market expansion, when planning phased property purchases, or securing future ownership in growing companies. In the Saudi market, they're particularly useful for compliant investment structuring under Shariah principles, helping both local and international investors manage timing and risk in their acquisition strategies.
What are the different types of Call option agreement?
- Call And Put Option Agreement: Combines both purchase and sale rights, giving parties maximum flexibility in Saudi markets
- Call Option Contract: Basic version focused solely on the right to purchase, common in straightforward asset acquisitions
- Call Option Shareholders Agreement: Specifically designed for company ownership transfers, including corporate governance provisions
- Put Option Agreement: Complementary agreement giving the right to sell instead of buy, often paired with Call options in sophisticated deals
Who should typically use a Call option agreement?
- Investors and Investment Firms: Primary users who seek to secure future buying rights in Saudi assets, particularly in real estate and corporate acquisitions
- Corporate Shareholders: Use Call options to structure ownership transitions and maintain control over company shares
- Legal Counsel: Draft and review agreements to ensure Shariah compliance and protection of client interests
- Financial Advisors: Structure deals and advise on timing, pricing, and risk management
- Company Directors: Authorize and execute Call options as part of corporate strategy and governance
How do you write a Call option agreement?
- Asset Details: Document precise description of shares, property, or assets covered by the option, including current market value
- Price Structure: Define the exercise price, any premiums, and payment terms that comply with Shariah principles
- Timeline Elements: Set clear exercise periods, expiration dates, and any conditions that trigger the option
- Party Information: Gather complete legal names, registration numbers, and authorized signatories of all parties
- Regulatory Check: Verify compliance with Saudi Capital Market Authority rules for the specific asset type
- Documentation: Our platform generates custom Call option agreements that ensure all these elements are properly structured
What should be included in a Call option agreement?
- Party Details: Full legal names, addresses, and registration numbers of option holder and grantor
- Asset Description: Detailed specification of the underlying assets with clear valuation methods
- Option Terms: Exercise price, duration, and conditions aligned with Shariah principles
- Exercise Mechanics: Precise procedures for executing the option and completing the transfer
- Governing Law: Clear statement of Saudi law application and dispute resolution mechanisms
- Representations: Statements confirming parties' authority and asset ownership status
- Termination Rights: Conditions for early termination and consequences
What's the difference between a Call option agreement and a Stock Option Agreement?
A Call option agreement differs significantly from a Stock Option Agreement in several key aspects, particularly within Saudi Arabia's legal framework. While both involve rights to acquire assets, their structure and application serve different purposes in the market.
- Scope of Assets: Call options can cover any asset type (real estate, business interests, commodities), while Stock Option Agreements specifically deal with company shares
- Target Users: Call options typically involve investors and business entities, while Stock Options are usually meant for employee compensation and retention
- Exercise Terms: Call options often have more flexible exercise periods and conditions, whereas Stock Options usually follow strict vesting schedules
- Regulatory Framework: Call options fall under general commercial law in Saudi Arabia, while Stock Options must comply with additional labor and corporate governance regulations
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