Sara owns a shop that sells a variety of art items. She handpicks the items for sale herself, and carefully displays them, each with a price tag carefully arranged on the shelves. She has a very expensive replica of an art piece in her shop by a famous artist, Salvador Dali, which is called "The Persistence of Memory". It is a piece that she admires very much, and was keeping for herself.

Sara kept the Dali painting replica in a corner of her shop until she could find the perfect spot to display it.

One day, Peter walked into Sara's shop. He was browsing the items on the shelves, when the painting in the corner caught his attention. Peter was a big fan of Dali's works, and he immediately realised that it was a very good replica. Peter also noticed that there was a price tag of $2,000 on the frame of the painting, but not attached to it. Peter took the painting and the price tag to Sara at the payment counter of the shop, and handed her his credit card for payment.

When Sara saw the painting, she almost fainted! She explained to Peter that the painting was her personal belonging, and that it was not for sale. Peter became upset. He pointed to the price tag that was found loosely sitting on the painting and demanded that Sara sold it to him for $2,000 as stated on the tag. Sara told him that the tag belonged to the painting that was hanging above the Dali painting, and that it must have fallen off onto the Dali painting.

Peter was not happy. He has come to you for your opinion on the following questions.

(a) Identify the nature of a price tag that is placed on an item in the shelves of Sara's shop.

(b) Assume that the price tag was firmly attached to the Dali replica. Apply your knowledge of contract law to identify the nature of the price tag this time.

(c) Peter argues that, the price tag was Sarah's offer. Therefore, when Peter picked up the Dali replica painting and presented his credit card to Sara at the checkout, there was a binding contract because he accepted the price offered on the price tag.

Cite the relevant contract law principles to each of the facts that Peter has presented and make your own informed decision as to whether Peter's arguments were correct at law.