1. Frank had some hay which had been cut and was ready for making into bales. John agreed with Frank that John would come to bale the hay with John's machinery and that if he liked the looks of the hay, then John would buy the finished bales, or otherwise, John would charge Frank a rental amount for the use of the machinery. After baling the hay, John wrote to Frank on June 18, offering to buy the hay for $2 per bale. On June 24, Frank answered, saying he hoped John would decide to pay him $3 per bale, but adding, "You can take the bales at your price". Two days later, lightning struck the stack of hay bales and the hay was destroyed. Frank sued John for the purchase price which of course John now refuses to pay. Is there a contract? Discuss fully the arguments each party will make.

2. On May 1, Brand Name Industries, Inc. (BNI), sent Carol a letter, via overnight delivery, offering to employ her to audit BNI's financial statements for the current year for $1,000. In the letter, BNI stated that Carol had ten days to accept. On May 5, Carol sent BNI a fax that stated, "The price for the audit seems too low. Would you consider paying $1,200?" BNI received the fax. The next day, Dan, an accountant from another CPA firm, offered to conduct the audit for $800. On learning of Dan's offer, Carol immediately e-mailed BNI, agreeing to do the work for $1,000. BNI received this e-mail on May 7. Explain why BNI and Carol do, or do not, have a contract.

3. Sally got into an argument with her mother and ran away from home. The first nite out she slept on a park bench, but on the second nite Sally got a room in the local motel. The motel manager asked to see Sally's ID and credit card, but Sally lied and said her mother was coming to the motel a little later that evening to stay there as well, and the mother would bring the credit card. The manager let Sally have the room. The next morning, the police arrived after finding out where Sally was, and took her home. The motel has sent Sally and her mother a bill for the night's lodging but both refuse to pay. If Sally is age17 what result? If Sally is age 18 what result? Does it make a difference? Discuss fully.