Two years ago Henry acquired an option to purchase a villa in a retirement village at $300,000, valid for 3 years. Henry is no longer in a position to exercise the option, but his friend, Esther, is. The market price of these villas is now over $400,000.

Required:

Advise Esther as to whether she can exercise Henrys option

Questions to Consider

Can Esther exercise Henrys option when she is not a party to the option?

Did she give consideration for the option?

If not, can Henry sell his option to Esther?

Could he allow Esther to exercise the option as his agent, thereby avoiding the operation of the privity doctrine?

What is the difficulty with this last approach for Esther?

Please use the following structure to answer PIRAC,

Parties

Issues

Rules

Application

Conclusion