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.

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BlackTom AI · Accepted Answer

Question restatement: Olga asks Sven if he wishes to sell his Harley motorcycle. Sven replies that he would not sell it 'for less than $2,000.' Olga then replies, 'I accept,' and hands him $2,000. A contract exists. Answer choices: True, False.

Option analysis:
- Option True (the statement that a contract exists): If Sven’s reply 'not for less than $2,000' is interpreted as a definite offer to sell at a price of $2,000, then Olga’s subsequent payment and expressed acceptance could form a contract. However, the phrasing 'not for less than' can be read as a price quotation or a proposal that invites negotiation rather than a binding offer. If viewed as mere commentary on the minimum price rather than a concrete, unequivocal offer, there is no definite terms agreement and thus no contract upon acceptance.
- Option False (the statement that a contract does not exist): This answer rests on treating Sven’s statement as not constituting a binding offer. In contract law, for a contract to form, there must be an offer, acceptance of that offer, and consideration. If Sven’s reply is merely a price threshold or invitation to negotiate rather than a clear, unequivocal offer of sale, Olga’s money could be seen as a counter-offer or as an attempted acceptance that lacks a mutually agreed-upon offer to accept. Without a clear offer and unambiguous acceptance matching those terms, there is no valid contract.

Why this reasoning leads to False: The critical point is whether Sven’s statement constitutes a definite offer. Language like 'not for less than $2,000' is often treated as an invitation to negotiate or as a price quote, not an explicit offer with a definite price and essential terms ready for immediate acceptance. If there is no unequivocal offer to sell at $2,000, Olga’s act of delivering $2,000 does not constitute acceptance of an offer, and thus no contract is formed.

Why the other view (if one chose True) would be flawed: Assuming Sven’s statement is a binding offer would require that the terms are complete and definite and that acceptance is communicated in a manner consistent with the offer. A mere statement of minimum price, without clear assent by Sven to those terms or a signed agreement, does not automatically create a contract simply upon payment. The acceptance must align with the offer's terms, and here the ambiguity around whether Sven offered or merely stated a minimum would undermine that alignment.

Bottom line: The key misconception is treating a minimum-price statement as an unequivocal, ready-to-accept offer. Since the terms indicate possible negotiation rather than a firm offer, the act of Olga paying $2,000 does not conclusively create a binding contract. Therefore, the conclusion that a contract exists is not correct, supporting the False answer.

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

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.

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