Once an option is exercised, it is classified as what type of contract?

When an option is exercised, it transforms into a bilateral executed contract. At the moment of exercise, both parties—the optionor and the optionee—are obligated to fulfill their respective duties specified in the contract. Prior to execution, the option is a unilateral contract, where only the optionor (the party granting the option) is bound to perform if the option is exercised. However, once the optionee (the party holding the option) decides to exercise the option, both parties are now committed to the agreement, hence it's classified as a bilateral executed contract.

This classification reflects the nature of the contract after exercise: both parties have completed their obligations, resulting in an executed contract. The initial unilateral nature changes because the optionee's choice to exercise the option enforces the obligations of both sides.