John owns a very expensive thoroughbred horse worth several hundred thousand dollars named Prince Charming that just ran in the Kentucky Derby (a horse race). Prince Charming came in last, much to John's frustration and embarrassment. John exclaims in a loud voice, "I'm selling that deadbeat horse to the first person who hands me $100 bucks!" John has:

Question

BlackTom AI · Accepted Answer

Question restatement: John declares in a loud voice that he is selling his horse to the first person who hands him $100, and he does so after the horse performed poorly. The task is to determine whether a contract offer was created.
Option 1: 'made an offer to anyone within hearing distance and will be bound by his offer to the first person who produces $100.' This treats the statement as a unilateral offer made to the world at large. However, for an offer to be effective, the offeror’s conduct and language must indicate an intent to be bound on terms definite enough for a contract, and typically, casual, offhand, or humorous statements do not meet the standard of a binding offer. Here, the context suggests impulsive venting rather than a deliberate, serious offer.
Option 2: 'made an acceptance to the first person who can produce $100.' This option misreads the situation: an acceptance occurs when a party agrees to an offer under its terms, not when a third party provides consideration after a purported offer. There is no mutual agreement at this point, only an announcer making a statement. Therefore, this is incorrect.
Option 3: 'not made an offer because under the circumstances a reasonable person would not conclude that John had intent to make an offer.' This reasoning aligns with contract principles: a contract offer requires a clear intent to be bound and definite terms. A loud, impulsive remark about selling to the first bidder upon payment of $100—made in frustration about a horse’s performance—would not, in ordinary circumstances, manifest the requisite intent to create a power of acceptance in others. The context supports that a reasonable person would not view this as a serious offer.
Option 4: 'made a firm offer and will be bound by his offer for a reasonable period of time.' The statement lacks the elements of a firm, definite, and clearly communicated offer. There is no stated time for acceptance beyond 'the first person who hands me $100,' and there is no mechanism ensuring acceptance by contemplation of a reasonable period. This makes it unlikely to be a binding firm offer.
Synthesis: The central issue is whether John’s remark demonstrates a present intent to form a contract with any prospective buyer and whether the terms are definite enough to constitute an offer. Given the emotionally charged context and lack of formalities, the reasonable expectation is that no binding offer was made. The option that asserts no offer was made because a reasonable person would not infer intent to contract appropriately captures this nuance. The other choices overstate the seriousness or definiteness of the remark and misinterpret how offers and acceptances operate in contract law.

LEGAL & REGULATORY ENVIRONMENT FIN 2050-04 (90533) FINAL EXAM

View Explanation

Log in for full answers

Similar Questions

A key element of a valid offer is the intent : The offeror must genuinely intend to be legally bound if the offer is accepted.

Advertisements are often invitations to make an offer. In most cases, we are still at preliminary stage and therefore we are not in front of a valid offer.

An offer may be defined as a statement of willingness to contract on specified terms made with the intention that, if accepted, there will arise a binding contract.

Advertisements are often invitations to make an offer. In most cases, we are still at preliminary stage and therefore we are not in front of a valid offer.

An offer may be defined as a statement of willingness to contract on specified terms made with the intention that, if accepted, there will arise a binding contract.

April put an advertisement in the newspaper advertising the sale of her computer for $500. Simultaneously, six people responded to the ad by mail with formal written acceptances. April is bound on all six contracts to sell her computer for $500.

When Olga asks Sven if he wishes to sell his Harley motorcycle, he replies that he would not sell it "for less than $2,000." Olga replies, "I accept," and hands him $2,000. A contract exists.

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler