seller's option contract

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Seller's Option Contract

A contract between a buyer and a seller where the seller has the ability to delay settlement of the contract beyond the normal time. A seller may exercise this option if he/she has difficulty in making delivery on the contract for any reason at all. The farthest possible settlement date is stated in the seller's option contract. This contrasts with a cash contract, where settlement is made before the regular settlement date.
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seller's option contract

A security transaction in which the date of settlement is delayed beyond the five business days in a regular-way contract. This very unusual transaction is generally caused by the unavailability of a certificate for regular delivery. The settlement date will be specified. See also cash contract.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
"There is all too often small print in contracts that virtually allows the milk buyers to change the rules as and when they want, as well as putting severe limitations on the seller, not least of all in limiting the seller's options to exit the contract,'' he said.