Motors entered into an oral option with Hap, Inc., for $50. The option was to purchase at cost any late model used yacht received by Motors as a trade in on a new yacht for the next 100 days. Hap paid the $50 in cash and promptly sent Motors a signed memorandum which correctly described the agreement and its terms. Motors did not respond until after 30 days had elapsed and it had discovered they had made a very bad bargain. Motors notified Hap that they would no longer perform under the terms of the option, which they alleged was invalid, and enclosed a check for $50 to Hap. Which of the following is correct?

1. The oral option is invalid for lack of consideration.
2. The Statute of Frauds can be validly asserted by Motors to avoid liability.
3. Motors has entered into a valid contract with Hap.
4. Options for a duration of more than three months are unenforceable.