Need help in analyzing the scenario to determine whether a valid contract still exists between The Friendly Dawg and landlord Lou.

Explain the elements of a valid contract, and identify which contract elements, if any, exist between The Friendly Dawg and landlord Lou.

Scenario

The Friendly Dawg is a retail pet supply store owned by Dave Dawgs. Dave has worked in the store since high school and took over running the store after his father died two years ago. Originally the store sold only pet food and supplies, such as animal food, bird cages, water bowls, pet beds, and so forth. Upon taking ownership, Dave added fish tanks with fish for sale. Recently he built a kennel and cages in a former storage area in the rear of the store in order to sell live animals, such as snakes, birds, dogs, and cats. Landlord Lou came by during renovations and asked what was going on. One of Dave's employees told Lou that The Friendly Dawg was expanding its inventory and needed the space. Landlord Lou told the employee, "Very exciting! Good luck!"

A few weeks later, landlord Lou began receiving complaints from the neighboring tenant, the Sunshine Yoga studio, that the noise from the dogs and parrots was very disruptive.

The signed lease between Dave Dawg's deceased father and Lou describes the business as a pet supply store only and does not mention selling live animals. The lease specifies a rent in the amount of $500 a month. Sunshine Yoga does not have a written lease. The owner of Sunshine Yoga, Jasmine, met Lou one night in a bar two years ago where he verbally offered to rent her the space for $300 a month. Jasmine claims that landlord Lou told her that night that she could rent from him forever and that he would never evict her.

Lou called Dave, asking him to quiet the animals. Dave said he would try, but the complaints from Jasmine continued. Dave also demanded that Lou improve the air-conditioning system, claiming it was too hot in the rear of the store for his animals and it was causing them to become agitated. Landlord Lou refused, claiming that air-conditioning was not meant to cool that area and it was not his job as landlord to take care of live animals.

Dave stopped paying his rent, claiming that he was not obligated to do so because Lou was breaching his obligation under the lease to maintain the property in good repair. The next day, a dangerous snake escaped through the air vents and slithered into the neighboring yoga studio, frightening Jasmine, the owner, such that she had a heart attack.

After recovering, Jasmine stopped paying her rent, claiming that the premises were unsafe due to the presence of wild animals. She also claimed that she has been very depressed and anxious as a result of the ongoing situation. And she contends that she has lost clients because of the noise coming from The Friendly Dawg.

The Friendly Dawg has been a good tenant, enjoys a strong customer base, and pays more in rent than Sunshine Yoga. Sunshine Yoga has always been late with rent, and Jasmine constantly bothers Lou over minor issues.