A) Is not correct as the unfettered discretion shows no agreement. There is no contract if that is the interpretation. So while the offeror *could* walk away with the deposit, that cannot be the legal interpretation as it would void the contract from the inception. Unfettered discretion does not a contract make.
B) I will assume the agreement is with the offeror's opinion, but don't know. However, there is nothing which would inhibit the offeror walking if this happened.
C) The "*Offeror's* reasonable descretion" is not objective but subjective. It is not a reasonable person's test and this answer is, essentially, reasonable or average person's test.
D) While with D, we would have something which would clearly be acceptable to the courts if the offeror wanted to back out, since we have no information about if the offeror wanted to back out here, it cannot be the correct answer.
The black letter law usually comes up in portrait painting. If there is any ambiguity in the clause of "personal satisfaction" with the portrait or job or whatever, it will default to an objective standard. However, when the actual agreement leaves no doubt that only "honest" satisfaction is meant (which I think this does) the problem falls to two categories. One, which is very personal (like the portrait) and those which are more utilitarian (like acceptance of the report). In the former there is a tendency to unfettered discretion and in the latter a tendency to a more objective standard. But even with the unfettered discretion the courts will often reform.
From the Hornbook:
"One it is decided that personal satisfaction is called for, the issue is the good faith of the party to be satisfied. This does not mean that a party's statement must be accepted. Such an agreement would be illusory. The dissatisfaction must be actual and not merely simulated. Under the good faith test, plaintiff must show that the defendant is, in fact, satisfied with the performance rendered or tendered and has other motives for testifying to dissatisfaction." And then describes how the true state of mind can be determined and says how "bad faith" must be proven.
So, it cannot be A because of "any", it cannot be C because we have a clear indication of a personal satisfaction clause, it cannot be D because that test is not one of personal satisfaction--although it could be a test of the genuineness of the rejection, only B gives us the thought that the offeror is not satisfied as the offeree agrees. But, even if that assumption is not true, if the offeror walks with the deposit, the offeree has waived the condition and would be estopped from asserting it in court.
