Giovanni has been looking to buy a cabin in the Sierra Mountains, as he

likes to go cross-country skiing during the winters. After looking for over six

months, he finds one cabin that looks very promising, but is more expensive than

he really wants to pay ($200,000). He pays the owner $2,000 for a non-

refundable "option" to buy the cabin for $200,000, anytime before July 31, 2021.

He continues to look for other, less expensive cabins during the spring and

summer of 2021, but does not find anything else that meets his needs. On

July 31, the owner of the cabin sends Giovanni a letter demanding payment in

full for the cabin, threatening to file a lawsuit for "specific performance of the

contract." Giovanni calls for an appointment with a real-estate lawyer, but the

appointment is not until next week. What is Giovanni's status at this point?

a. Giovanni is not obligated to go through with the purchase. He just had an

option to purchase - not a contract to purchase.

b. Giovanni is obligated to go through with the purchase.