Please analyze the following problem. Be sure to state your reasoning.

The following facts are based on a real case. In the early days of the computer revolution, Merchant bought a computer and decided that she needed a surge protector. She shopped around and found several models that ranged in price from $40 to $70. She then called Seller, who said that he sold the best surge protectors on the market because he used gold to halt the flow of electricity after a lightning strike. Merchant asked the price and Seller said "Fifty-four twenty." Merchant said "That's a reasonable price" and agreed to buy Seller's surge protector. It arrived along with a bill for $5,420. Merchant insisted that she only owed $54.20. If there is litigation between the parties, how should a court resolve the dispute?