Problem Solving - Contract - Formation - Offer and Acceptance

Bill is reading the Daily News when he comes across an advertisement for the Humding 500, the latest top-of-the-line mobile phone. Bill really wants this mobile phone and is excited to read that it is being advertised for $500 less than the usual price. Bill rushes to the store which placed the advertisement in the Daily News and asks for a Humding 500. He takes the phone to the checkout and is upset when he is asked to pay the usual price. Bill asks to see the manager. The manager explains that the staff member who designed the advertisement made a mistake with the price. The manager then says that because Bill is so disappointed, he can have the mobile phone for $50 less than the usual price. Bill is confused and he phones you for advice.

Identify the legal issues, set out and apply the relevant case law and reach a conclusion based on the law. Give reasons for your application of the law.