James says he would like to buy Mike's motorbike for $3,000. Mike responds by saying he would accept $4,000 given all the work he has put into it. James says "Ok. I'll give that. Here's $2,000 now, and I'll pay the balance in two installments."

Question

Quizplus · Accepted Answer

This is a contract. A contract is created when one party makes an offer, the other party accepts, and there is an exchange of consideration (in this case, money). James made an offer of $4,000, and Mike accepted this offer. The fact that James is making a partial payment and agreeing to pay the balance in installments does not negate the fact that a contract has been formed.

James Says He Would Like to Buy Mike's Motorbike for $3,000