Ans.
PRICE
Price is an essential condition of a contract of sale of
goods. According to Section 2(10), price is the money consideration for a sale
of goods. Money means legal tender money in circulation. Old and rare coins are
not included in the definition of money.
How is the price of the
goods ascertained?
Section 9 provides 4 modes of ascertainment of price. The
price in a contract of sale may be—
(a) fixed by the contract
(b) may be left to be fixed in an agreed manner (such as
market price or fixation of price by a third party).
(c) may be determined by the course of dealings between
parties, (such as manufacturing cost, market price).
(d) a reasonable price (if price cannot be fixed in
accordance with the above provisions.
What is a reasonable price is a question of fact
dependent on the circumstances of each particular case. [Sec. 9(2)]
Consequence of
Non-Fixation of Price by Third Party [Section 10]
1. The parties may agree to sell and buy goods on the
terms that the price is to be fixed by the valuation of a third party. If such
third party fails to make the valuation the contract becomes void.
2. However, if the buyer has received and appropriated
the goods or any part thereof, he becomes bound to pay reasonable price.
3. If the third party is prevented from making the
valuation by the fault of the seller or the buyer, the innocent party may
maintain suit for damages against the party in fault.
Stipulations regarding
payment of price [Sec. 11]
In a contract of sale, stipulations as to time may be of
two kinds:
- Stipulations relating to time of payment, and
- Stipulations not relating to time of payment, for e.g. relating
to time of delivery of goods
(A) Stipulations as to time for payment of price are not
regarded as essence of contract, unless a different intention appears from the
terms of the contract. Thus if the payment is not made in time, the seller
cannot avoid the contract but can claim damages. For example A sells a laptop
computer to B with a stipulation that payment should be made within 3 days. B
makes the payment after 7 days of the contract. Here A cannot avoid the
contract on the ground of breach of stipulation as to time of payment.
However, time of payment can be made essence of the
contract, if there is an express provision in the contract of sale. If there is
no express provision in the contract of sale, with regard to time of payment,
then time of payment is not deemed to be the essence of contract.
(B) Whether any other stipulation as to time (e.g. of
delivery of goods) is of the essence of contract, will depend upon the terms
agreed upon. It means that time of delivery of goods etc., can also be made essence
of the contract of sale if an express provision to this effect is made in it.
If no such provision is made, then time of delivery of goods will not be the
essence of contract. (Sec. 11) Suppose if time of delivery of goods is made the
essence of the contract of sale by providing express terms in this regard -
what will be the remedy for the buyer, if the seller does not make the delivery
within the stipulated time? (The buyer can avoid the contract)
(C) It may be noted that in ordinary commercial contracts
for sale of goods, time is prima facie of the essence with respect to delivery.
