Rowe Engineering ("Rowe") was awarded a two-year contract to design and build a new courthouse (the "Project") in St. John's, Newfoundland. Recognizing that additional expertise in structural engineering was required in order to fulfil the terms of the contract, Malcolm, Rowe's President, engaged in extensive discussions with Rosalie regarding her working on the Project. Rosalie is a well-known structural engineer, recognized in the industry for her attention to detail and her ability to meet deadlines.

Following the discussions between Rosalie and Malcolm, Malcolm wrote to Rosalie to ask if she would consider entering into a two-year contract, at an annual salary of $200,000. The letter asked that Rosalie get back to him by June 24th.

Upon receiving the letter, Rosalie called Malcolm to ask if Rowe would be willing to go higher on the salary and indicated that she was looking for $250,000. Malcolm indicated that there was no room for negotiation on the salary.

Rosalie had an interview later that week, on June 20th with Global Engineering, and wanted see if they would make her an offer with better terms. Her interview with Global went well, but then ended up making her an offer for only $175,000 a year, for two-years.

On that same day, Rowe interviewed another engineer, Morris, who was, by all accounts, as equally accomplished as Rosalie. During the interview process, Morris indicated that he would be happy to accept a contract at $200,000.

On June 21st, Rosalie wrote a letter to Malcolm stating that she accepted Rowe's offer of employment at $200,000 a year and put it in the mail. Later that day, Malcolm phoned Rosalie and indicated that they would be hiring Morris, instead, and that she should disregard his earlier letter.

(a) Determine whether there is a contract between Rosalie and Rowe. In your answer, make sure you discuss and apply all of the basic elements of a contract.

(b) Discuss the law of revocation and its application to the facts.

(c) Discuss the three elements Rosalie must prove to succeed in an action against Rowe for breach of contract.

Now, suppose that Rosalie had accepted an offer from Rowe to enter into a contract at an annual salary of $200,000. A week after signing the contract, she has second thoughts. She calls Malcolm and says that she will walk from her contract if they do not increase her pay to $250,000 a year. Malcolm agrees.

When Rosalie gets her cheque, though, she sees that her salary is being paid at $200,000 a year.

(d) Will Rosalie be successful if she brings a breach of contract claim, alleging that she should be paid $250,000 a year? What challenge will she face?