Why has a contract not been formed between Katie and May?

A contract is formed when there is an offer, acceptance, consideration, and the intention to create legal relations. In this scenario, May's counter offer is pivotal because it alters the terms of the original offer made by Katie. When May makes a counter offer, it signifies a rejection of Katie's initial offer. This means that the original offer is no longer on the table.

The key concept here is that a counter offer effectively nullifies the original offer. This is a fundamental principle in contract law, which dictates that the original offer cannot be accepted once a counter offer has been made. Since May did not accept Katie's original proposal but instead suggested different terms, this rejection means that no binding contract has been formed between them.

In this context, although other options may hint at reasons for a lack of contract formation, they do not directly address the main issue of the counter offer being a rejection of the initial offer, which is essential for understanding why the contract does not exist in this case.