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PRICE


Price is defined under section 10 if Cap 31
10. (1) The price in a contract of sale may be fixed by the contract, or may be left to be fixed in a manner thereby agreed, or may be determined by the course of dealing between the parties.
(2)          Where the price is not determined in accordance with the foregoing provisions, the buyer must pay a reasonable price; and what is a reasonable price is a question of fact dependent on the circumstances of each particular case.

Section 10 assumes that a contract has been made by the parties and
The two beacons of the sale of goods are property and price.  Section 10 presupposes the existence of a contract.  It assumes that a contract has been made by the parties and then proceeds to explain the methods by which the price can be ascertained.  But the first point to consider is whether a contract has in fact been finally agreed upon by the parties, and the absence of an agreement as to the price may show that the parties have not yet reached a concluded contract.

Definition of price can be used as clear evidence to show lack of a meeting of the minds.


Section 10 Cap 31

10. (1) The price in a contract of sale may be fixed by the contract, or may be left to be fixed in a manner thereby agreed, or may be determined by the course of dealing between the parties.
(3)          Where the price is not determined in accordance with the foregoing provisions, the buyer must pay a reasonable price; and what is a reasonable price is a question of fact dependent on the circumstances of each particular case.

The two beacons of the sale of goods are property and price.
Section 10 assumes that a contract has been made by the parties and
Section 10 presupposes the existence of a contract.  It assumes that a contract has been made by the parties and then proceeds to explain the methods by which the price can be ascertained.  But the first point to consider is whether a contract has in fact been finally agreed upon by the parties, and the absence of an agreement as to the price may show that the parties have not yet reached a concluded contract.

Definition of price can be used as clear evidence to show lack of a meeting of the minds.  (no consensus ad idem)

Section 10 by and large begs the entire course of the Sale of Goods.  Terms like buyer and seller, price which has not been fixed etcetera.

The Sale of Goods law falls into the group of facilitative law.  Law has two categories, facilitative and command law.  Facilitative law is law that you are not bound to apply but if you undertake certain transactions and you want them to be legally enforceable then the Sale of Goods law or Contract law comes in as facilitative law.  Facilitative law covers areas like contract law.  A will also falls under facilitative law.   In facilitative law, the parties are not forced to apply that law but if they enter into transactions that require this law then it has to be applied.

Only the courts can ascertain the right price, then the Sale of Goods ceases to be facilitative and becomes command if the court comes in to decide the price.

May & Butcher V. King [1934] 2 KB 17


The House of Lords here held that an agreement for the sale of goods at a price to be later fixed by the parties was not, in the circumstances of the case, a concluded contract.

The ratio decidendi was that an agreement for the sale of goods at a price to be later fixed by the parties is not a concluded contract.

Recent cases have confirmed that the law does not recognise an agreement to agree.

Courtney Fairburn Ltd v. Tolaini [1975] 1 WLR 1


The Court of Appeal refused recognition of a contract at a price ‘to be agreed’. An agreement to negotiate was not enforceable, and was not persuaded that the argument was improved by glossing a bare agreement to negotiate with a duty to negotiate in good faith.

In this case the terms of a contract were to be negotiated and the courts as late as 1975 said that that did not constitute a Sale of Goods Contract.  The terms had not been agreed upon so there was no contract.

Walford V. Miles [1992] 2 AC 128


The plaintiffs negotiated to buy a photographic processing business from the defendants and they entered into what was allegedly a ‘lock out’ agreement according to which the defendant agreed to terminate negotiations with the third parties and not to consider alternative offers from third parties.  There was no time frame given.  The defendant sold the business to a third party and naturally the potential plaintiffs went to court asserting that the agreement provided that parties with an exclusive opportunity could try and come to terms with the defendant.  They further argued that the agreement implied a duty to negotiate in good faith with the plaintiffs and that the opportunity should endure for a reasonable time.  The argument went all the way to the House of Lords and as one of the Q.C’S argued at that level, he said that it was strange that a simple legal issue should occupy the minds of all levels of the English Courts.
The House of Lords held that
1.            An agreement to negotiate was not enforceable;
2.            That an agreement to negotiate was not enforceable and was not made any better by glossing other words like a duty to negotiate in good faith.

‘Lock out’ is when a potential Seller and potential Buyer give each other time to think over a bargain.  The time is not endless.
The court also held that the content of the lock out agreement while legally acceptable must legally conform with all the factors but cannot be just open ended.

 
 
 

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