Sara, a wholesale fruit dealer, sent the following letter to Bud, a fruit merchant: “Feb. 1, offer 1,000 boxes of Los Angeles, San Gabriel oranges, at $10.60 per box, F.O.B. Los Angeles: March delivery. Unless I receive your acceptance by 2 P.M. on Feb. 4, I will dispose of them elsewhere. (Signed Sara).” Sara’s letter was received by Bud on Feb. 2, at 3 P.M. At 1 P.M. on Feb. 2, Sara mailed Bud the following letter. “I regret to inform you that I am compelled to withdraw my offer dated Feb. 1.” Sara’s second letter was not received by Bud until Feb. 3. Meanwhile at 5 P.M. on Feb. 2, Bud mailed the following letter to Sara: “I accept your offer dated Feb. 1.

(Signed Bud).” Because of a severe snowstorm, which disrupted all means of communication, Bud’s letter was not delivered to Sara until 4 P.M. on Feb. 4.

(a) Is there a contract between Sara and Bud?Explain.

(b) Assume that the words “Unless I receive your acceptance by 2 P.M. on Feb 4, I will dispose of them elsewhere” were not included in Sara’s Feb. 1 letter to Bud. Is there a contract between Sara and Bud? Explain.