BUSINESS LAW 1-CONTRACTS Use the following facts to answer Questions 8 through 1
ID: 326668 • 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.”
16. Assume for purposes of this question only that in addition to Statement 11, Big Tex also says, “I’ll give you until noon to accept.” It was 10:30 a.m. when Big Tex said this. Tommy leaves the lot to run some errands and think about the car. Tommy returns to the car lot at 11:30 intending to purchase the car and sees a gigantic “SOLD TO JOE SMITH” sign sitting in the front window of the car. Tommy runs up to Big Tex and says “But you said I had until noon to accept your offer,” to which Big Tex replies, “To bad. You snooze, you lose. Another customer was interested in the car and agreed to pay me $5,000 for her.”
Can Tommy insist that Big Tex sell him the car for $4,400?
a. Yes, because Big Tex said he would give Tommy until noon to accept.
b. Yes, because an offeror cannot revoke his or her offer until a reasonable time has passed after making it.
c. No, Big Tex revoked his offer before Tommy accepted it.
d. No, because nothing in Statement 11 constituted an offer in the first place.
Explanation / Answer
The correct option is a.
Big Tex had made an offer that Tommy had until noon to buy the car for $4,400. Tommy accepted the offer and so it became a contract. Hence, Tommy is acting with the terms of the contract when he's asking Big Tex to sell him the car for $4,400.
Big Tex cannot revoke his offer without informing Tommy and without his consent.
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