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 hed rather not talk about. Without his modeling work, he cant afford gas for his truck. Whats more, he doesnt 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 Texs 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 its okay if I call you Tommy isnt it? What can I do for you today?

Statement 2 (Tommy): Im thinking about buying that bright red Ford Fiesta over there.

Statement 3 (Big Tex): Oh yeah? Well, shes 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 couldnt 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, Id have trouble selling it.

Statement 10 (Tommy): I understand, but I wont give you $4,500 for it. Its not worth that much.

Statement 11 (Big Tex): Ill take $4,400 for her, but thats the best I can do.

Statement 12 (Tommy): Ill give you $4,250.

Statement 13 (Big Tex): You drive a hard bargain Tommy. I like that. Reminds me of me. Youve got a deal.

11. What is the legal effect of Statement 8?

a. It terminates Big Texs prior offer.

b. It terminates Big Texs prior offer and constitutes a counteroffer.

c. It is an offer.

d. It is an acceptance.

e. It has no legal effect.