Inhae wants to sell her expensive exercise bike for $1000. She phones her good friend Olivia to see if Olivia is interested. Olivia says she would like to buy the exercise bike for that price, but she would have to borrow the money from her sister and she would need some time to find out if that is possible. Inhae says that Olivia can have two weeks to find out but after that she, Inhae, would have to look for other buyers. Olivia says "that's very kind, I will get back to you. In return let me buy you lunch this weekend." Inhae says "I look forward to it."

The next day Inhae bumps into another good friend Edgar and mentions to him that she is selling the exercise bike. Edgar has seen the bike and tells Inhae that he would love to have it and offers her $1,250 for the bike. Inhae is excited to get the extra money and agrees and phones Olivia that night to tell her that she has decided to sell the bike to someone else for a higher price. Olivia is upset and says "but we had a contract!"

Is Olivia correct? Is Inhae free to sell the exercise bicycle to Edgar? Provide legal authority for your reasoned answered.