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.