What are the typical mechanics to exercise an option?

• A. Verbal notice; no payment; any time during production
• B. Written notice plus payment; exercise no later than start of principal photography
• C. Automatic exercise after option period ends
• D. Exercise only if script approved by author

Answer: (B)

Exercising an option means converting the option into the rights to develop or acquire the property, and the usual way this happens is by giving a written notice to the optionor and paying the option price, with a firm deadline for action. This written notice and payment structure provides clear evidence of intent and consideration, and the deadline—often no later than the start of principal photography—ensures the rights are secured before production moves forward. Verbal notice or exercising without paying the option price wouldn’t meet typical contract requirements and could jeopardize the conversion of the option. Automatic exercise at the end of the option period only occurs if a contract explicitly provides for it; normally an affirmative step is required. Requiring script approval by the author as a condition to exercise isn’t standard for exercising an option; approval may affect development terms but doesn’t govern the basic mechanics of exercise.