Homewares Ltd advertised in the Miranda Morning Times a number of different air purifiers. Magda saw the advertisement and visited Homewares' Cronulla store. She thought she could benefit from one in her lounge room, filtering moisture and dog smells out of the air. Her lounge room is an open plan room including the kitchen. A Swansong Lark was advertised in the paper as suitable for a large room and was only $899. Magda said to the sales assistant that she was interested in that particular model and would they negotiate the price? The sales assistant was hesitant, so Magda asked what her best price would be. The sales assistant said that product was a popular model and she really couldn't take less than $899. Magda said she would think about it.

Magda returned to the store an hour later and spoke with a different sales assistant, Gwen, who happened to be an old school friend who Magda hadn't seen for 2 years. Magda said that earlier she could have bought it for $850 so would they honour that offer now. Gwen agreed and Magda used her credit card to buy the product.

Discuss the legal effect of each communication and determine if an agreement was formed.

Assuming there was an agreement reached between Magda and Homewares Ltd, discuss whether it would be supported by the necessary intention and consideration to be recognised as a contract.