Akira, a hip hop star, was sitting in a hotel lobby when she was approached by Lucy, a record company executive. Lucy offered Akira $5 million for a three-year contract to record three albums for her company, which was the fair market value for a star of Akira's fame. Akira had no desire to record for Lucy's company, but after discussing the matter with Lucy for about half an hour, she signed a contract written on the back of a receipt from the hotel restaurant that Lucy wrote up on the spot. Akira thought it was a joke and had no subjective intentions of entering into the agreement. Which of the following is true of this situation?

Multiple Choice

• There is no contract because Akira's subjective intentions prevent formation of the contract.
• Since the contract was written without lawyers present, it was likely not really serious, so no contract was actually formed.
• Because the terms were fair, the parties are bound by the contract regardless of their intent or capacity.
• Akira's actions made her appear serious; therefore, she is bound by the contract despite what she was inwardly thinking.