PRICE DETERMINATION UNDER THE CONTRACT OF SALE OF GOODS

Section 8 of the Sale of Goods Act defines what constitutes price in a contract of sale otherwise known as the basis for price determination. Thus, the provision of section 8(1) provides that the price in a contract of sale maybe fixed by the contract, or may be left to be fixed in a manner agreed or may be determined by the course of dealing between the parties. Section 8(2) provides that where the price is not determined in accordance with the foregoing provisions, the buyer must pay a reasonable price. What is a reasonable price is a question of fact dependent on the circumstances of each case. Arising from the foregoing provision of section 8 of the Sale of Goods Act, it can be deduced that the price must be monetary which;

        i.     May be fixed by the parties, or;

      ii.      May be left to be fixed in a manner provided by the contract for instance by valuation or arbitration.

    iii.   May be determined by the course of dealings between the parties the parties such as through previous transactions between them or any relevant custom of trade or profession. However, if the price is not so fixed or determined, there is a presumption that the buy will pay a reasonable price.

Section 9(1) provides that where there is an agreement to sell goods on the terms that the price is to be fixed by the valuation of a third party and the third party failed to make such valuation, the agreement is void. But in a situation where the goods or part of them have been delivered to and appropriated by the buyer, he must pay a reasonable price. Section 9(2) provides that where such valuation by the third party is prevented by fault of either the buyer or the seller, the non defaulting party may maintain an action against the party with fault.