Dimitri Wrote to Pat Offering to Sell His Neo-Expressionist Painting

question 41

Multiple Choice

Dimitri wrote to Pat offering to sell his neo-expressionist painting, "Red Sails in the Sunset," for $25,000. Pat replied that, since it would require that he redecorate, he could not really pay more than $18,000 for the painting. Dimitri replied that he was greatly hurt and deeply insulted by such an offer, especially from someone who was supposed to be a connoisseur of fine art, but that, since he was a little tight for cash, he would be willing to let it go to Pat for $13,000 for old times' sake. Pat immediately replied, saying that he accepted the painting at $13,000 and enquiring whether Dimitri wanted it in cash. Dimitri then realized that he had typed "$13,000" instead of "$23,000" in his second letter to Pat.

• A) Since a reasonable person would have realized that Dimitri had made a mistake, given their prior correspondence, a court would not allow Pat to snap up the offer.
• B) Since the courts do not consider the adequacy of consideration in determining whether or not a contract has been reached, Pat will be able to enforce the contract for $13,000.
• C) Pat could not be expected to read Dimitri's mind and, since he accepted the offer in good faith, Dimitri cannot now back out of their contract.
• D) It is not the function of the court to consider the motives of a party negotiating a contract in asking for what to others might seem to be inadequate consideration from the other party, so Pat will be able to enforce the contract.
• E) It was up to Dimitri not to make mistakes like this and the court will not allow him to use his own carelessness to excuse him from meeting his obligations under the contract.

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Definitions:

Consolidation Process

The consolidation process involves combining the financial statements of a parent company with those of its subsidiaries to produce a single set of financial statements that represent the financial condition and operations of the entire group as a single entity.

Acquisition

Acquisition refers to the process where one company takes over controlling interest in another company, either through purchase of shares or assets.

Controlling Interest

An ownership interest in a business that allows the holder significant influence or control over its operations and decisions, typically through the possession of more than 50% of voting shares.

Voting Common Stock

Common shares that entitle shareholders to vote on company policies and board member selections.