Bernard owns an oil painting and a smaller pencil sketch, which are both thought to be by Daniel, an artist who has recently died, and whose work is fetching increasingly large amounts at auction. Bernard writes to his friend Edwina, offering to sell her 'my little Daniel picture' (meaning the sketch) for $2,000,000. Edwina, who knows little about modern art, accepts, saying: 'I am pleased to accept your offer. As you may know, I am hoping to build up a collection of modern paintings.' Bernard delivers the Daniel sketch while Edwina is out. Edwina in fact wanted the oil painting, not the sketch. Before she can return it, however, another friend, who is an expert on Daniel's work, tells her that the sketch is of poor quality and not worth more than $50,000. A good quality sketch would have been worth $700,000 to $1,000,000. Bernard, however, who had himself bought the sketch for $1,500,000 refuses to take it back, and insists that Edwina must pay him $2,000,000. The oil painting is valued at $700,000.

Advise Bernard and Edwina