. On May 1, Brand Name Industries, Inc. (BNI), sent Carol a letter, via overnigh
ID: 469610 • Letter: #
Question
. On May 1, Brand Name Industries, Inc. (BNI), sent Carol a letter, via overnight delivery, offering to employ her to audit BNI’s financial state¬ments for the current year for $10,000. In the letter, BNI stated that Carol had ten days to accept. On May 5, Carol sent BNI a fax that stated, “The price for the audit seems too low. Would you consider paying $12,000?” BNI received the fax. The next day, Dan offered to conduct the audit for $8,000. On learning of Dan’s offer, Carol immediately e-mailed BNI, agree¬ing to do the work for $10,000. BNI received this e-mail on May 7. Explain why BNI and Carol do, or do not, have a contract.
Explanation / Answer
They do not have a contract as carol failed the offer and counter offered. A contract is formed when there is an offer, an receipt and consideration. The promise to pay $1000 was satisfactory consideration.
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