Identify each of the elements to a contract, including those relating to contract acceptance and rejection in the factual setting above. Once you identify the elements, support your answer using the fact pattern above and the contract terms we have studied.

Linda is the purchasing agent for ADCO, Inc., which sells navigation and guidance systems to the general public and the United States Government. ADCO, Inc. needs to acquire a specific microchip. Linda decides to use both print a social media to solicit bids to fulfill ADCO, Inc.'s needs.

Linda places the following notice on December 19, 2015:

ADCO, Inc. hereby offers to purchase 1,200,000 "microchip X45-2356", a specialty chip used in conjunction with the processing and real time updating of navigation guidance systems. ADCO, Inc. requires 100,000 chips per month, for twelve consecutive months, commencing March 1, 2016 and ending February 28, 2017. ADCO, Inc. will pay $1.50 per chip per month as long as 100,000 chips are delivered to ADCO, Inc. warehouse located at 18 Fenton Drive, White Plains, New York by common carrier, on the 15th day of each month. Deliveries made after the 15th day of each month shall incur a penalty in the amount of $1,000.00 per day for each day or part of a day delivery is late. Responses by email to Linda.Jones @ADCO.net.

John Sinco, who is the owner and Chief Executive Officer of CHIPCO, Inc. sees the solicitation placed by ADCO, Inc. CHIPCO, Inc. is a manufacturer of computer chips and specializes in navigation and guidance microchips. John decides to reply to the solicitation, as follows on December 29, 2015:

CHIPCO, Inc., 4 Water Drive, Elmsford, New York, hereby accepts ADCO Inc.'s offer to supply 100,000 "microchip X45-2356", or its generic equivalent, on or before the 15thday of each month commencing March 1, 2016 and ending February 28, 2017 at the price of $1.50 per unit chip delivery at 18 Fenton Drive, White Plains, New York by common carrier, as set forth in the solicitation.

John sends the proposal by email, as instructed.

On December 30, 2015, Linda replies:

Offer accepted, modification rejected in whole.

On March 15, 2016, 100,000 X45-2356 microchips arrive at ADCO, Inc.'s warehouse in White Plains, New York. CHIPCO, Inc. sends ADCO an invoice for the 100,000 chips in the amount of $150,000.00, terms payable upon receipt. ADCO, Inc. immediately pays the invoice. Each month, April, May, June, and July, the same procedure is followed.

On August 15, 2016, the microchip order does not arrive. On August 16, 2016, a major hurricane, Hurricane Debbie, strikes the Northeast leaving the Eastern seaboard of the United States without electricity until August 21, 2016. On August 23, 2016, CHIPCO, Inc. delivers 100,000 chips to ADCO Inc.'s warehouse in White Plains, New York and sends an invoice to ADCO, Inc.in the amount of $150,000.00.

On August 25, 2016, ADCO, Inc. sends payment to CHIPCO in the amount of $142,000.00. On August 27, 2016, CHIPCO sends an email to ADVO stating that the $8,000.00 of the invoice remains unpaid and that failure to pay the balance will affect future delivery and products.

ADCO refuses to pay the remaining $8,000.00 of the August CHIPCO invoice.

On September 15, 2016, CHIPCO delivers 100,000 generic X45-2356A microchips to ADCO and sends an invoice in the amount of $142,000.00. ADCO immediately pays the invoice.

On October 1, 2016, ADCO receives a complaint from GEMLIN, Inc., an end user of the microchip X45-2356 stating that a customer who uses their navigation system in her car, was guided into a river on a foggy night by the navigation system. A check of the unit showed that the microchip was a X45-2356A, not the X45-2356.

On October 15, 2016, CHIPCO delivers 100,000 X45-2356A microchips to ADCO, sends ADCO an invoice in the amount of $142,000.00, which ADCO pays immediately.

On November 1, 2016, Linda discovers that the X45-2356 has been replaced with the X45-2356A and immediately sends notice to John that she was cancelling the remainder of the contract.

CHIPCO immediately brings an action in the New York State Supreme Court, Commercial Division, Westchester County, against ADCO for damages in the amount of $600,000.00, four months remaining on the contract at $150,000.00 per month.

ADCO counterclaims against CHIPCO claiming that it failed to supply the microchip specified in the order, deliberately replaced the microchip ordered with a cheaper, faulty version and did so with malice and knowledge that the microchip provided was inferior. ADCO further claimed there was never a contract between the parties as CHIPCO'S counteroffer "supply 100,000 "microchip X45-2356", or its generic equivalent" was rejected by ADCO. XADCO claimed $2,000,000.00 in damages resulting from the inferior product provided by CHIPCO.

CHIPCO responded to ADCO'S claims by demonstrating that ADCO accepted delivery of both the X45-2356 microchip and the X45-2356A and paid invoices until August, 2016, pursuant to the contract CHIPCO maintains to have been in full force and effect