An option contract, as heretofore stated, is raised into a mutually binding contract of sale thus crediting the relation of vendor and purchaser between the parties only after a timely election on the part of the optionee in accordance with the terms of the option. Accordingly, the payment or tender of the purchase price is important in determining whether or not the optionee has perfected his right to specifically enforce the contract or in

32. Waterman v. Banks, 144 U. S. 394; Richardson v. Hartwick, 106 N. W. 252.

33. Meidling v. Trefz, 48 N. J. Eq. 638, 23 Atl. 824; Boyden v. Hill, 198 Mass. 477, 85 N. E. 413.

34. Eagle v. Pettus, 109 Ark. 310, 159 S. W. 1116.

35. Darragh v. Vicknair, 126 La. 171, 52 South 264.

36. May v. Getty, 140 N. C. 310, 53 S. E. 75.

37. Cleaves v. Walsh, 125 Mich. 638, 84 N. W. 1108.

38. Turner v. McCormick, 56 W. Va. 161, 49 S. E. 28, 107 Am. St. Reps. 904, 67 L. R. A. 853.

39. Baxter v. Calhoun, 222 Fed. 111.

40. Ward v. Davis, 154 Mich. 413, 117 N. W. 897.

lieu thereof to maintain an action for damages by virtue of the breach in case the optionor should refuse to consummate the sale. The manner of exercising an option is governed by the language of the instrument granting it.

Where payment of the purchase money or a part thereof must accompany the election, a compliance of such provision is necessary in order to effect a binding contract of sale.41

However, its terms may require merely that notice be given of the exercise of the option right and leave the matter of payment to be thereafter settled.42

In the former case, payment of the purchase price in exercising the option is a condition precedent to the creation of a contract of sale. In the latter case, there is an election to take the land on the terms proposed, payment of the purchase price being part of the executory contract of sale brought into existence by the election.43

Where land is subject to an encumbrance, if a tender of the purchase price is necessary in exercising the right of the option, the amount of such encumbrance may be deducted,44 and it has been held that a strict tender may be dispensed with where the encumbrance is of such a nature as to be incapable of ascertainment without a judgment of the court.45