You are bargaining over the price of a new car. Suppose you as the potential buy

Question

You are bargaining over the price of a new car. Suppose you as the potential buyer, do not want to pay more than $20,000 for the new car, though it is actually worth $34,000 to you. the seller of the new car is willing to part with it for any price above $11,000 but would like to receive the hgihest price she can.

Suppose your goal is to purchase the new car for 20,000 what could you do to obtain the car for $20,000?

You could obtain the car for $20,000 if you

A. declare you will never pay more than 20,000

B. make an enforcable bet with a thrid party for 15,000 that you will not spend more than 20,000 for a new car.

C. sign a leagally binding document with your spouse that youll pay her 9,000 if you spend more than 20,000 for a new car.

D. increase flexibility to make bids by taking out a 14,000 loan

E. purchase new tires for 1000 that can only be used on new cars

Explanation / Answer

Answer is option B) because enforceable bet may or may not be legally binding and if the found any lack of capacity to agree upon, the contract becomes void or invalid.

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