Charles offered to sell to Constance a personal watercraft that was not running very well for $500. Constance was interested but not willing to pay $500. She said "I'll give you $400." Charles said that he would think about it. Later, the same day, Charles asked Donna if she would be interested in purchasing the personal watercraft for $500. Donna said "Would you consider $450?" Charles said he would think on it. A few minutes later, Everett who had heard that Charles wanted to sell the watercraft accepted Charles' offer to sell for $500, and they agreed that he would pick up the watercraft the next day. A few minutes later, Constance called saying that she accepted Charles' offer to sell the watercraft for $500. A few minutes after that, Donna called and told that she accepted his offer to sell the watercraft for $500. Charles told Constance and Donna that he had already sold it, and they are angry, threatening to sue. Additionally, through no fault of anyone, there was a fire at Charles' home that night and the personal watercraft burned. Everett was not happy. A dispute ensues regarding what obligations Charles has, if any.

What was the status of the negotiations between Donna and Charles immediately prior to the fire?

Donna cannot accept Charles' offer because she did not do so in her initial conversation with Charles.

Donna cannot accept Charles' offer because he already sold the personal watercraft, and that terminated the offer to her.

Donna rejected Charles' offer by making a counteroffer.

Donna did not reject Charles' offer because she merely made an inquiry.