Dictionary of Procurement Terms

The contractual right, established in a purchase document, to buy a good or service at a fixed price within a specified time. See also: Option.

A contract term that allows for the buying or selling of a commodity, currency, or security at a fixed price at an undetermined future date as long as the option remains valid.

A unilateral right in a contract that the entity may choose to exercise to purchase additional supplies or services called for in the contract, or to extend the period of performance. See also: Buyer’s Option.

In accordance with contract terms, an option that allows a continuance of the contract for an additional period of time. See also: Option to Renew.

A contract provision that allows a party to reinstate the contract for an additional term beyond that stated in the original contract. See also: Option to Extend.

1. A supplier’s right to compel a purchaser to buy at a particular price and time. 2. On option granted to the supplier to make delivery within a specified, limited period.