Price under a contract of sale of goods.

By Koushambi Sengupta

We know, price is one of the very essential conditions when it comes to the contract of sale of goods. The consideration given in the form of money in the sale of goods is called price.

Section 2(10) of the Sales of Goods Act, has described a little about price. It is established that no sale can occur without a price. The price is generally paid or promised to be paid according to the agreement between the parties. Payment is usually in the form of a hundi, cheque, bank deposit, and others. An agreement to pay the price for goods also constitutes an excellent contract of sale. 

Modes of price-fixing- price for goods can be fixed in any of the following forms and as agreed by the parties- 

A. Price can be expressly fixed by the contract itself.

This is the most general and usual form of fixing the price. The parties have the liberty to fix any price they like and the court cannot question the accuracy of the price fixed. But, the sum has to be a definite one. Where the price fixed is different from what is agreed between the parties, such agreement is void ab- initio. 

B. Price can be fixed in a manner agreed in the contract. 

The price of goods can be fixed in a manner as mentioned in the contract. In other words, in a manner, as agreed by the parties in the contract. 

In some agreement, the price may be uncertain or ' not capable of being fixed'. In such cases, the agreement becomes void ab- initio due to its uncertainty. Such cases are- 

• where the price is agreed to be whatever sum the seller agrees to charge from a third party. 

• where the price is decided to be fixed by one of the contracting parties.

It is to be remembered that if the price is not fixed due to some reason, the contract shall not be void ab- initio due to its uncertainty. The market price of goods on the date of supply of such goods shall prevail. 

C. Price can be determined based on the course of dealings between the parties.

Suppose, the buyer has previously paid to a seller, the price prevailing on certain goods, on the date of placing the order. Then, in subsequent transactions, the price as on the date of order will only be paid. 

D. In case, the price of goods cannot be determined through any of the ways mention earlier, the buyer is bound to pay a reasonable price to the seller.

This article does not intend to hurt the sentiments of any individual, community, sect, or religion, etcetera. This article is based purely on the author’s personal opinion and views in the exercise of the Fundamental Rights guaranteed under Article 19(1)(A) and other related laws being enforced in India for the time being.