A contract between two parties is valid only if one party accepts

Question

A contract between two parties is valid only if one party accepts a legitimate offer from the other; an offer is not legitimate if someone in the position of the party to whom it was made would reasonably believe the offer to be made in jest.

The principle stated above, if valid, most helps to justify the reasoning in which one of the following arguments?

(A) Joe made a legitimate offer to buy Sandy’s car and Sandy has not rejected the offer. Thus, there was a valid contract.

(B) Kenta accepted Gus’s offer to buy a shipment of goods, but Gus, unknown to Kenta, made the offer in jest. Thus, the contract was not valid.

(C) Frank’s offer to buy Mindy’s business from her was legitimate. Thus, if Mindy is a reasonable person, she will accept the offer.

(D) Hai’s offer to sell artworks to Lea was made in such a way that no one in Lea’s position would have reasonably believed it to be made in jest. Thus, if Lea accepts the offer, they have a valid contract.

(E) The only offer that Sal made to Veronica was not a legitimate one. Thus, regardless of whether Sal made the offer in jest, there is no valid contract between them.

Destro0511 · Answer

Wouldnt (D) make a better example ?

shubh1qrcoin · Answer

(E) directly applies the principle by asserting that because the offer isn’t legitimate (regardless of any jestful intent), no valid contract exists.

(D) is not as directly tied to the principle because it shifts attention to the acceptance step, rather than emphasizing the central point: the legitimacy of the offer is what counts.

bb · Answer

I am kind of with you. D seems such a sweet choice - I picked D. It applies the principle. 
E on the other hand does the opposite and you don't need a principle there since the offer is made in jest....

However, this is an LSAT question it seems based on the phrasing of the question stem and while helpful in practice is not quite what you would see on the GMAT. So maybe I am missing something too. I am with D.

GMATNinja  - what do you think? Is E really the OA?

bb · Answer

OK. I have googled the question and the answer is indeed E. It is a nasty LSAT question. 
But to solve the question you have to diagram it - something people do a lot on the LSAT.

The problem with D as I understood it is that it is the opposite of what the statement says:

Statement says: A contract is an offer that is accepted and it is not legitimate if someone can think it was made in jest.

Thus, the trick is the negation (big deal on the LSAT) that the offer is not made legitimate if nobody could think it was made in jest. I hope GMAT Ninja can better explain this. I am not at all comfortable with LSAT questions.

ManifestDreamMBA · Answer

I have tried to take a stab. Please let me know if there is any gaps in the reasoning.

A contract between two parties is valid  only if one party accepts a legitimate offer from the other This is Necessary condition 
Contract valid --> Legitimate offer

An offer is not legitimate  if someone in the position of the party to whom it was made would reasonably believe the offer to be made in jest. This is sufficient condition 
Made in jest --> Not Legitimate offer
Legitimate offer --> Not made in jest (contrapositive)

Combined
Contract valid --> Legitimate offer --> Not made in jest
OR
Made in jest --> Not Legitimate offer --> Not valid contract

(A) Joe made a legitimate offer to buy Sandy’s car and Sandy has not rejected the offer. Thus, there was a valid contract.
 Reversed necessary and sufficient conditions

(B) Kenta accepted Gus’s offer to buy a shipment of goods, but Gus, unknown to Kenta, made the offer in jest. Thus, the contract was not valid.
 The person (Kenta) in the position of the party to whom it was made would reasonably believe the offer to be made in jest. If they don't know, we can't say anything

(C) Frank’s offer to buy Mindy’s business from her was legitimate. Thus, if Mindy is a reasonable person, she will accept the offer.
 There is no correlation. The prompt does say Accept offer if it is legitimate

(D) Hai’s offer to sell artworks to Lea was made in such a way that no one in Lea’s position would have reasonably believed it to be made in jest. Thus, if Lea accepts the offer, they have a valid contract.
 Not made in jest doesn't lead me anywhere.

(E) The only offer that Sal made to Veronica was not a legitimate one. Thus, regardless of whether Sal made the offer in jest, there is no valid contract between them.
 This makes sense  
 Made in jest -->    Not Legitimate offer --> Not valid contract

GmatStuck · Answer

This is a conditional reasoning passage. So, 1st thing i do is break it down into what is sufficient and what is necessary most of the time the answer will depend on identifying that.

Contract between 2 parties = Sufficient
One Party accepts a legitimate offer from other = Necessary
Then there is a contrapositive statement given for the same conditional reasoning.

Trap Ans:
A: Both party needs to accept the offer to be a legitimate offer become a contract not just one.
B: Other party need to have reasonable believe of jest for the offer to be illegitimate.
C: Conditioning is on legitimate offer and accepting offer not reasonable and accepting offer.
D: this introduces mistaken reversal. if you accept the offer, then it becomes the contract is not aligned with what passage says about sufficient and necessary condition.
E : Correctly implemented contrapositive reasoning

kayarat600 · Answer

A few good takes here is what works for me notice how no one in leas position would accept it which is irrelevant only parties that are offered and believe in it's legitimacy can decide if it's in jest or not

this doesn't really help our base statement at all your job is to look for anecdotal evidence of sorts that support base statement

The last option clearly spells out the offer isn't legitimate there are two ways for it to not be legitimate as it's mentioned that the jestnpart doesn't matter it's clear that Veronica declined the offer making the jest part moot l.

Hitesh0701 · Answer

Inference 1: If offer is made in jest>>>Offer is not legitimate one
Inference 2: If offer is not legitimate one>>> Not a valid contract

This much is inferable from the argument
E is targeting second inference.

mkishwar32 · Answer

I did not understand the reason why is D not correct

guddo · Answer

A contract between two parties is valid only if one party accepts a legitimate offer from the other; an offer is not legitimate if someone in the position of the party to whom it was made would reasonably believe the offer to be made in jest.
 
 The principle stated above, if valid, most helps to justify the reasoning in which one of the following arguments?

The key part of the principle is that  a legitimate offer is necessary for a valid contract . Therefore, if the only offer made was not legitimate, there cannot be a valid contract.

(A) Joe made a legitimate offer to buy Sandy’s car and Sandy has not rejected the offer. Thus, there was a valid contract.

Incorrect. A valid contract requires acceptance. Merely failing to reject an offer does not establish acceptance.

(B) Kenta accepted Gus’s offer to buy a shipment of goods, but Gus, unknown to Kenta, made the offer in jest. Thus, the contract was not valid.

Incorrect. The principle does not say that an offer is illegitimate merely because the person making it intended it as a joke. What matters is whether someone in Kenta’s position would reasonably believe it was made in jest.

(C) Frank’s offer to buy Mindy’s business from her was legitimate. Thus, if Mindy is a reasonable person, she will accept the offer.

Incorrect. Nothing in the principle says that a reasonable person must accept a legitimate offer.

(D) Hai’s offer to sell artworks to Lea was made in such a way that no one in Lea’s position would have reasonably believed it to be made in jest. Thus, if Lea accepts the offer, they have a valid contract.

Incorrect. The principle says that if an offer would reasonably be viewed as a joke, then it is not legitimate. But the reverse does not necessarily follow: merely showing that the offer would not be viewed as a joke does  not prove that it is legitimate . Also, accepting a legitimate offer is only a necessary condition for a valid contract, not a sufficient one.

(E) The only offer that Sal made to Veronica was not a legitimate one. Thus, regardless of whether Sal made the offer in jest, there is no valid contract between them.

Correct.   A valid contract requires acceptance of a legitimate offer. Since Sal’s only offer was not legitimate, that necessary condition cannot be satisfied. Whether Sal actually intended the offer as a joke is irrelevant once we already know that the offer was not legitimate.

Answer: (E)

guddo · Answer

(D) is not correct because it makes two jumps the principle does not allow.

First, if an offer would reasonably be seen as a joke, then it is not legitimate. But the reverse is not guaranteed: if it would not be seen as a joke, that does  not automatically make it legitimate .

Second, the principle says acceptance of a legitimate offer is  required  for a valid contract. It does not say that acceptance of a legitimate offer is enough by itself to guarantee a valid contract.

That is why (D) does not follow.

KarishmaB · Answer

This is an LSAT question - Such a question is unlikely in GMAT Verbal but is fair play in GMAT DI so let's look at it.

Principle:  
- A contract between two parties is valid  only if  one party accepts a legitimate offer from the other; - Necessary condition
- an offer is not legitimate  if  someone in the position of the party to whom it was made would reasonably believe the offer to be made in jest. - Sufficient Condition

Note carefully that if "the one to whom the offer is made would reasonably believe that it was made in jest, then the offer is illegitimate. 
We don't know anything about what happens if the one making the offer is just messing around.

(A) Joe made a legitimate offer to buy Sandy’s car and Sandy has not rejected the offer. Thus, there was a valid contract.

Accepting the offer is necessary for a valid contract. Not rejecting is not the same as accepting. Ignore.

(B) Kenta accepted Gus’s offer to buy a shipment of goods, but Gus, unknown to Kenta, made the offer in jest. Thus, the contract was not valid.
  
Gus, the offer maker, made the offer in jest. We don't know how that impacts the validity of the offer. We know it is not a part of our principle. Hence not correct.

(C) Frank’s offer to buy Mindy’s business from her was legitimate. Thus, if Mindy is a reasonable person, she will accept the offer.

No conditions on when a person "should" accept the offer. Irrelevant.

(D) Hai’s offer to sell artworks to Lea was made in such a way that no one in Lea’s position would have reasonably believed it to be made in jest. Thus, if Lea accepts the offer, they have a valid contract.

For a valid contract, it is  necessary  to have an acceptance. The acceptance may or may not be sufficient. For example, perhaps they need to sign a contract in front of a notary too to make it a valid contract. The principle does not state that acceptance leads to a valid contract - only that acceptance is necessary.

(E) The only offer that Sal made to Veronica was not a legitimate one. Thus, regardless of whether Sal made the offer in jest, there is no valid contract between them.

Acceptance of a legitimate offer is necessary for a valid contract. Since the offer was not legitimate, it is not a valid contract for sure as per our principle. Hence this is as per the principle given.

Note: This question is a prime example of "don't fall in love with an option." Many learners like (D) so much that they do not even evaluate (E) properly.

Answer (E)

A contract between two parties is valid only if one party accepts

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A contract between two parties is valid only if one party accepts

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