BUSINESS LAW 1-CONTRACTS Use the following facts to answer Questions 8 through 1
ID: 2511147 • Letter: B
Question
BUSINESS LAW 1-CONTRACTS
Use the following facts to answer Questions 8 through 17
Tommy Tarleton needs a new car. He currently owns a mega monster truck that he bought when he was making bank as a hand model, but that work dried up after an unfortunate table saw accident that he’d rather not talk about. Without his modeling work, he can’t afford gas for his truck. What’s more, he doesn’t have much cash on hand, and his credit is shot. Having little other choice, he drives down to a local used car lot, a crummy little spot called Big Tex’s Car Shack, where Big Tex “stacks ‘em deep and sells ‘em cheap.”
When Tommy gets on the lot, Big Tex himself helps Tommy. After Tommy and Big Tex trade pleasantries, the following conversation occurs:
Statement 1 (Big Tex): “So Tommy – it’s okay if I call you Tommy isn’t it? What can I do for you today?”
Statement 2 (Tommy): “I’m thinking about buying that bright red Ford Fiesta over there.”
Statement 3 (Big Tex): “Oh yeah? Well, she’s a real beauty. Owned by a little old lady. She only drove it to church on Sundays. Never been wrecked, and it only has 25,000 miles on it.”
Statement 4 (Tommy): “That sounds great. I absolutely do not want to buy a car that has been in a wreck.”
Statement 5 (Big Tex): “So waddaya think Tommy? Would you give me $5,000 for her?”
Statement 6 (Tommy): “Would you take $4,000?”
Statement 7 (Big Tex): “I couldn’t do $4,000, but I will take $4,500 for her.”
Statement 8 (Tommy): “Would you consider taking $4,000 if I trade in my mega monster truck too?”
Statement 9 (Big Tex): “No. With gas prices on the rise, I’d have trouble selling it.”
Statement 10 (Tommy): “I understand, but I won’t give you $4,500 for it. It’s not worth that much.”
Statement 11 (Big Tex): “I’ll take $4,400 for her, but that’s the best I can do.”
Statement 12 (Tommy): “I’ll give you $4,250.”
Statement 13 (Big Tex): “You drive a hard bargain Tommy. I like that. Reminds me of me. You’ve got a deal.”
10. A counteroffer occurs in:
a. Statement 7
b. Statement 8
c. Statement 10
d. Statement 11
e. Statement 12
Explanation / Answer
Answer:
A counteroffer is a proposal that is made as a result of an undesirable offer. A counteroffer revises the initial offer and makes it more desirable for the person making the new offer. This type of offer permits a person to decline a previous offer and allows offer negotiations to continue.
Hence, counteroffer occurs in Statement 8.
Reason: In statement 8 Tommy offers 4000 along with his mega monster truck.
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