Also known as: prices · priced · pricing
Written by attorneys · grounded in primary & secondary sources — see below
The amount of money or other consideration exchanged for goods, services, or property in a transaction. In sales of goods the price may be left open when the parties intend to be bound and a reasonable price at delivery is supplied by law. In land sales under equitable conversion the buyer remains obligated to pay the full price even after destruction of the property.
Premier Manufacturing signed a binding contract to buy a warehouse from Pulse Media for $2.4 million. Two weeks later a fire destroyed the building. Under equitable conversion the risk of loss had already passed to the buyer at contract formation. Premier Manufacturing must still pay the full price at closing even though the improvements no longer exist.
Phoenix Technologies manufactured five custom servers identified to a contract with Pioneer Energy. Pioneer Energy refused to pay and the servers had no ready resale market. Phoenix Technologies sued for the price under UCC 2-709 because reasonable efforts to resell would be unavailing. The court awarded the contract price plus incidental damages.
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Paula Pierce's antique printing press was destroyed by negligence. The court valued the press at $180,000 using established market prices on the date of loss. Under the applicable rule Paula Pierce recovered that amount plus interest running from the valuation date until judgment.
Preston Pratt received a donative transfer of land subject to a right of first refusal in his sibling at a price equal to the bona fide third-party offer. Because the price term and exercise period were reasonable the provision did not constitute a restraint on alienation.
Portia Price, an attorney, placed a newspaper advertisement listing fixed fees for routine wills and uncontested divorces. The state bar sought to discipline her for violating a blanket ban on lawyer advertising. The advertisement of truthful prices for routine services received First Amendment protection as commercial speech.
Paul Peterson contracted to purchase a retail building from Priscilla Parks. Before closing a storm damaged the roof. Under the majority equitable-conversion rule the risk had passed to the buyer at contract formation. Paul Peterson remained obligated to pay the full contract price and could not demand a reduction.
Yes. Under the UCC parties may form a binding contract even when the price is left to be agreed upon later, provided they intend to be bound. If they fail to agree, the law supplies a reasonable price at the time of delivery.
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Under the majority rule of equitable conversion the buyer bears the risk once the contract is formed and must pay the full price even if the property is destroyed. The seller holds legal title only as trustee for the buyer.
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Yes. UCC 2-709 permits the seller to recover the price of goods identified to the contract when reasonable efforts to resell at a reasonable price would be unavailing. The seller must hold the goods for the buyer and credit any later resale proceeds.
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No. A right of first refusal in a donative transfer is not a restraint on alienation when the price the designated person must pay and the time for exercise are both reasonable.
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