James advertises in the newspaper to sell his used car for $6,000. Eric test drove the car and then offered James $5,400 for the car. In this case:
A) the two parties have created a legally enforceable contract.
B) Eric's offer represents an acceptance of the original terms.
C) there is no agreement and no contract.
D) there is no agreement, but there is a valid contract.

Question

Quizplus · Accepted Answer

James advertised his car for $6,000, which is an invitation to offer. Eric's offer of $5,400 is a counteroffer which means he is rejecting the original offer and proposing a new one. Therefore, there is no agreement and no contract between the two parties.

James Advertises in the Newspaper to Sell His Used Car