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1. Ed, a businessperson, is a friend of Fran, the owner of a Good Bean Coffee & Bagels store. Every
day, Ed spends five minutes in Fran’s store, looking at the goods and usually buying one or two
cinnamon buns or bagels. One a%ernoon, Ed goes into the store, looks at the items, and picks up
a $1 chocolate brownie. Ed waves the brownie at Fran without saying a word and walks out. Is
there a contract? If so, how would it be classified in terms of forma)on, performance, and
enforceability?
There are three elements that are necessary for an offer to be effec)ve. This includes: There must be a
serious, objective inten)on by the offeror, the terms of the offer must be reasonably certain, or definite,
so that the parties and the court can ascertain the terms of the contract and the offer must be
communicated to the offeree. There is no valid contract in this situa)on because the terms were not
definite and they were not communicated to the offeree.
2. On December 1, Petroleum, Inc., sent Rachel & Rico (R&R) a le3er, via overnight delivery,
offering to employ R&R to review Petroleum’s tax situa)on for the current year for $10,000. In
the letter, the company stated that R&R had ten days to accept. On December 5, R&R sent an e-
mail message that stated, “The price for the tax analysis seems too low. Would you consider
paying $15,000?” Petroleum received the message without responding immediately. The next
day, Smith & Taylor, an R&R competitor, offered to conduct the appraisal for $8,000. On learning
