Mr. Smith gives Ms Jones a check for $5000 as option to purchase her land located in Napa Valley - both parties sign the option to buy contract - Ms Jones accepts the check for $5000 as an option to buy her land.

Ms Jones agreed to sell to Mr. Smith her 2 acre commercial lot for $300,000.

Mr. Smith has 90 days to exercise his option to purchase Ms Jones property at her asking price of $300,000.

1. Assuming Mr. Smith does nothing with this option contract - at the end of the 90 days does Mr. Smith get his $5000 back. Explain why or why not - as to whether Mr. Smith will get his option money back?

2. Assuming Mr. Smith decides to exercise his option to purchase the property from Ms. Jones during the 90 days - does that leave a balance owed to Ms. Jones of $295,000? Is the $5000 that Mr. Smith gave deducted from the agreed purchase price of $300.000.00?

3. In order to protect his interest / option to buy Ms. Jones property - what steps would you recommend Mr. Smith to take after entering into the written option contract with Ms. Jones?

4. Assuming Ms. Jones, during the 90 day option, sells the property to the ABC Corporation - what legal recourse, if any, does Mr. Smith have?

5. Changing the facts a little - Mr. Smith & Ms. Jones agree on an option contract; Mr. Smith gives Ms. Jones a check for $5000; however, they never bother to put the deal in writing? Thirty days into this oral agreement - Ms. Jones decides to take another higher offer and sell her property to someone else.Mr. Smith may have to enforce the agreement he has with Ms. Jones.