Peter, Ray and Egon are fired from cushy jobs in academia and decide to move to the private sector. Because of the dangerous nature of their pest control business they form a limited liability company. Rays parents die and he inherits their family home, intending to use it to help fund the start-up.

Eager to secure financing, the members visit their friendly local bank. The bank agrees to loan the members $300,000 to start their business provided the home is pledged as security. Because of the uncertain market for their new business, the bank demands the members personally guarantee the loan. The bank also wants to charge 36% interest per year. Eager to pursue their dreams, Ray and Egon eagerly agree, shaking hands with the loan officer. Does a contract exist? Why or why not? If there is a contract at this point, would it be unilateral or bilateral?