Modes of Fixing the Price

In a sale of goods, money consideration is known as “price”. Without money (Price) there are no sales. Unless otherwise agreed, the price should be pay or promised to be paid, in legal tender money. Price may be paid by cheque, hundi, Bank deposit etc. the requisite to make a valid sales of goods contract is to pay a price in money and not the mode of payment.

Modes of Fixing the Price: Sec 9 says that price may be paid in one or the other following modes:

1.  It may be Expressly Fixed by the Contract Itself. It is the usual mode of fixing price. The parties are free to fix any price they like and court will not bother as to adequacy of price. But the sum should be definite. Where an alternative price is fixed, the agreement is void ab-nitio as it involves an element of wager. E.g. A offers to B a cow. B agrees to buy for Rs. 5000/- if cow gives 10 ltr milk and only Rs. 100/- if it fails to do so.

2.  It may be fixed in accordance with an agreed manner provided by the contract:

It may by agreed that the buyer would pay the market price prevailing on a particular date or that the price is to be fixed by a third party ( e.g. valuer ) appointed with consent of parties. If no price is fixed, then the contract is void for uncertainty because in that case law usually allows market price prevailing on the date of supply of goods as the price bargained for.

3.  It may be determined by the course of dealings between the parties. If the buyer has been previously paying to a particular seller the price prevailing on the date or placing the order, the course of dealing suggest that in subsequent transactions also the price as on the date of order will be paid.

4.    If the price is not capable of being determined in accordance with any of the above modes, the buyer is bound to pay to the seller “A reasonable price”. What is reasonable price depends of circumstances. Generally, the market price of the goods prevailing on the date of supply is taken as reasonable price.

Agreement to Sell at Valuation (Sec. 10) says where there is an agreement to sell goods and the price is to be fixed by the valuation of a third party and such that parties fails to fix the price (either because he cannot value of because he does not want to value ) the contract becomes void, except to as part of goods delivered and accepted, if any, under the contract, as regards which the buyer is bound to pay a reasonable price. If, however any one of the parties, namely, the sellers or the buyer, prevents the third party from making the valuation, the innocent party may maintain a suit for damages against the party at fault. Although in this case also the contract becomes void, yet the party at fault is bound to compensate the other party for the actual loss suffered by him because of the Act of prevention.

What is Goods? Types of Goods

Rights of an Unpaid Seller against the goods

Essential Features of Right of Stoppage of Goods in Transit

Who is an Unpaid Seller? Characteristics of an Unpaid Seller  Buyers wrong is unforgivable in purchase  Rules regarding transfer of title on sale  What are the benefits of a Bonded Warehouse?  Effect of Pershing of Goods  Documents to Title To Goods  Who are the Common Carriers?  Difference between Common Carriers and Private Carriers ============================================================================== This site is mainly dedicated for Students of Law Schools, Law Universities, Students of Higher Education in Law, Admission in Law Schools, Scholars in Law, Students of Bar-at-Law, Law admission information, College of Law, Law Notes, Law Training, Law Tuition,  Law Study Guidelines, Business Law, Students of ACCA, CIMA, CFA,CA,ICWA,CPA