Business Law Assignment Example | Topics and Well Written Essays - 1250 words

Business Law - Assignment Example Peter accepted the price of $ 190 and Mary took the bicycle away. The case scenario deals with the conditions surrounding the formation of valid business contracts. A contract is defined as an agreement between two parties that creates legal obligation to the two parties to perform or abstain from performing a certain obligation or action (Farnsworth, 1991). A contract must entail an offer by one party and acceptance of the offer by the other party. The advertisement placed in the local newspaper by Peter is not an offer but an invitation to treat. Peter is inviting interested persons to make an offer for the purchase of the bicycle. Accordingly, advertisements are classified as invitations to treat since the seller can refuse to sell the item at price if it is mistakenly marked (Blum, 2007). The advertisement is displayed to a larger number of people with an undefined way of selecting whom to sell the bicycle. For instance, the advertisement does not clarify whether to sell the bicy cle to the first person to accept the labeled price. It this case, the advertisement is geared at generating interests and prolonging negotiations towards the formation of the contract (Stone, 2005). After the invitation to treat, Jonathan makes an offer to through a telephone to purchase the racing bicycle at a price of $ 160. However, rules of contract stipulate that the subject matter of contract must be present at the time of making the offer. According to the Uniform Commercial code,