Auto Inputs Pty Ltd (Auto) offers to sell a quantity of mechanical component parts to Blue Hills Pty Ltd (Blue Hills) for a price of $35,000. Blue Hills asks for time to consider the offer and check its financial situation. Auto promises to keep its offer open for seven days. Blue Hills makes its enquiries and decides to buy the goods. It advises Auto it accepts the offer on the fifth day after the offer is made. In reply, Auto advises it has already sold the goods to another entity some hours earlier.

1. a) Advise Blue Hillswhether it has formed a valid contract with Auto.
2. b) Would it make any difference if the goods had been damaged by heavy rain that flooded parts of Auto's storage yard on the fourth day?