From the perspectives of offer and acceptance related to the law of contract, the legal

issues in the question are whether a legally binding contract exists between Alan and

Bob, like whether there are any valid offers and acceptances.

Offer, acceptance of the offer and consideration are the three essential

elements in constituting a legally binding contract, none of them can be eliminate

when a valid contract is formed. In addition, offer is a definite promise made by the

offeror to the offeree. It presents the intention to be bound by the contract with certain

terms communicated to the offeree. On the other hand, acceptance is an unconditional

expression of the offeree's assent to the terms of the offer and thus an agreement is

made which can be made in writing, orally or even by conduct.

In the question, when Alan displayed a notice on his motorcycle, an invitation

to treat was constituted, an advertisement to be precise. An invitation to treat is not an

offer, it is just inviting other parties to make an offer which is free to accept or reject.

Alan was intended to sell his motor to anyone for $25,000. However, as Alan's notice

is not precise enough, it was not posted for a specific person with specified terms. So

instead of a valid offer, only an invitation to treat was made.

Then, a valid offer was given to Alan from Bob when Bob phoned Alan on the

Monday morning because the communication of an offer was completed. To fulfill

communication of an offer, offer must be communicated to the offeree by spoken

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words or writing. Therefore, Bob as an offeror made an offer of $20,000 to buy the

motorcycle to Alan who was the offeree.

According to the case, Alan only said he would seriously consider when

responding to Bob's offer which is not an effective acceptance. An valid acceptance

must be communicated to offeror, acceptance cannot be deemed or assumed and also

offeree must agree to all the terms of the offer. Hence, without a direct assent to Bob's

$20,000 offer, no acceptance was made.

Besides, the way that Alan's wife, Cathy, who received and placed the note on

Alan's desk was not treated as a valid acceptance too. In contract law, an offer can

only be accepted by the offeree, that is, the person to whom the offer is made. Since

Alan was the only offeree in the case, there was no legal right for Cathy to accept the

offer for Alan.

Likewise, on the other day, Bob changed his mind and posted a letter with a

cheque of $5000 to state he was willing to purchase the motor in a total of $25,000 to

Alan's house. The above action was not a counter offer. In order to form a counter

offer, there must be rejection by the offeree of the terms of the previous offer. Since

Alan did not reject Bob's offer before he changed his mind, there was no counter offer

constituted in the case.

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 In conclusion, Bob had made a valid offer to Alan for buying Alan's

motorcycle, yet Alan did not accept his offer. Hence, without acceptance from the

offeree, there are not legally binding contract between Alan and Bob. Alan had the

right to accept another offer from anyone else, like Dick, so Alan did not have to sell

the motorcycle to Bob even he was willing to pay $25,000 on Tuesday. Nevertheless,

the action of Alan not giving any response after Bob as an offeror gave him a cheque

caused confusion and inconvenient to Bob. I suggest Alan should reject Bob's offer

directly or told Bob that the motorcycle had been bought by Dick on Monday night in

order to save Bob the trouble.