Ed offered to sell his car to Mike for $$1500.$ Mike came over to Ed$$s house with his mechanic brother to look over the car. The two looked over the car and drove it around for hours. Mike finally decided to buy the car and asked Ed if he would take $$1000$ for the car. Ed said no$,$ only $$1500,$ and Mike gave Ed the $$1500.$ Two days later, Mike calls Ed and angrily tells him that the car$$s engine is giving him trouble. Mike demands that Ed give him at least $$500$ of the money back and says that if he doesn$$t get it$,$he knows where Ed lives and he has friends.$$

$1.$ Must Ed return the $$500$ to Mike?

$2.$ Does either have a sufficient basis for a breach of contract action?