Tulsa daily world. [volume] (Tulsa, Indian Territory [Okla.]) 1905-1919, 1910-08-16
usE AND ABUSE on OPTION

USE AND ABUSE on OPTION
The following editorial from the
the California oil World, pubiIca-
tion that Insists on doing It's own
thinking on the uses ana abuses of
option. applies with equal force To the
oklahoma oil fields.
"Optous constitute business de-
vice. which, Judging from their fire.
qucucy rs a necessary part OF the pro-
credings In deal carried through an
intermediate agency The intermc-
diary agent exists in a large majority
of cases the transaction between priu-
Ciplcs direct being the exception and
not the rule, Options, then, 1t must
bee admitted, are highly useful but
their abuse Is notable and 1t Is more
than probable that the oil land owner
who insists upon a short time option
is largely to blame for that measure
Of It's disrrputc into which California
oil land matters have fallen In fin
ancial crutrrs
II rs seldom that any transaction
OF importance is consumatrd without
the use of an option somewhere dur
ing the negotiations For this reason
the option has come 10 be an i'm
portant factor In all transactions
leading To- the transfer Of oil proper
ties The usual form of option Is an
agreement whereby the owners of the
property agree TO sell at "A certain
price but the person securing the
option does not necessarily agree 10
purchase. II is therefore a one-slded
| instrument unless cash or other CON
sideratiun is paid by the one secur-
| ing the option,
within the last year or two during
the height Of what might he termed
the oil BOOM 1t has been a common
practice among large number of
promoters aud brokers'. some of them
responsible but large number of
of them not responsible individuals,
to secure options on oil properties
land with these in hand, to solicit the
assistance OF capitalists and others
wishing to become Interested In oil.
As usual thing, the promoter goes
| To the owner OF the land and tells him
that he has some people practically
decided to take over the property
| but that II is necessary, in order to
| ruuSumatr the deal. to have an agree
mcnt whereby he can guarantee the
prospective purchaser that he is able
to deliver the property. For this OPP
| tiun he offers nothing except his word
that he has parties interested in the
option, In nmety-nine cases out OF
one hundred he secures the potion
and he starts out to peddle 1t. Through
the many channels capital has of
transmitting information, it soon be
comes known that this property has
| been offered To several persons, any
one of whom may have been told he
had exclusive right to decide within
"a reasonable time regarding the pro-
position This sort of an agreement
rs not tayorably received 10y the pur-
chasing public. tor the reason that
in a great many cases nothing ever
comes of the transaction. The mans
property has been offered and reiec-
ted and therefore has been injured
In greater or less degree In the eyes
lot possible buyers and the california
fields as whole have been placed
in false position.
II a man has not faith enough I'm
his purchasers to be able to put up
a small deposit he has no right to
expect the owner Of the property to
have faith In him. but on the other
hand, il he has faith enough in his
ability to sell the property to put mp
a deposit he should be given ample
time To Consummate the deal salts
taCtorily II is sometimes necessary
in carrying on the early negotiations
to secure a preliminary report by
some expert and to investigate in a
general way the condition OF the title
of the property and To verify state
ments OF the owner regarding the
productivity of the property. In such
Instances 1t is no more than right
the owner should grant the promot-
cr or prospective buyer reasonable
time in which 10 make his preliminary
investigations. After this is done, how
ever mutual interest on both sides
shrould he reinforced by a written
agreement in which the owner Of the
property on the one side furnishes
an agreement 10 sell. while the pro-
moter on the other gives him in re-
turn either cash deposit or some
other consideration Of value,
If this method was carried out In
every instance, II would do away with
. number of Objectionable practices
that have grown up in the last year
or two and would eliminate from all
reputable deals a large number Of
men who add nothing whatever To
the value of the deal by their interest
IN II. but on the other hand overload
II with so-called commissions for
which they have done practically no
work
To sum up. the owner should be
willing TO give at least sixty or ninety