Definition | The price in a contract of sale may be fixed by the contract, or left to fix in a manner agreed by the contract, or determined by course of dealings; Where not determined, B must pay a reasonable price; Reasonable depends of circumstances of each case. Basic provision: if parties fail to agree, fallback is that price will be reasonable Better to agree price in order to avoid uncertainty |
Agreeing price SGA S8-9 | By fixed price list or quotation; Agreed during negotiation (shld be documented); Determined by a consistent course of dealing between parties; Price fixed by valuation of a third party (contract void if does not happen – s9) |
International provisions | Article 55 CISG similar provision to s8- ‘the price generally charged for such goods sold under comparable circumstances in the trade concerned’. PICC ‘price generally charged in comparable circumstances in the trade concerned’ UCC refers to ‘reasonable price’ |
Drafting considerations | Price lists & quotations: Price escalation clauses: If likely that costs of raw materials or labour will increase between signing contract and delivery, can include price escalation clause Absent clause, S will not be able to change the price B2B: clause subject to reasonableness test under s3 UCTA VAT: Price taken to include VAT unless otherwise specified (VAT Act 1994, s19 (2)) If exclusive, must be expressly stated |
PAYMENT |
Duty to pay the price - SGA SS 27-28 | Under s27 SGA, it is B’s duty to pay the price Where contract provides for cash on delivery, B cannot claim possession unless it is able to pay in accordance with the contractual terms agreed Only payment in full will discharge B’s liability (unless agreed otherwise) |
International provisions | CISG: B’s obligation to pay (Art. 53) UCC: obligation contained in Art 2-301 PICC no direct obligation but likely to be implied for sale transaction (Art 5.1.2) |
drafting considerations | Time for payment: SGA 28 states time for payment is when goods are delivered (unless agreed otherwise). Where payment linked to invoice, Ps may wish to agree that: Payment is made in advance B is given a credit period (say 30 days from delivery of invoice) in which to pay Method of payment: If S accepts cheque, treated as conditional payment; if cheque not honoured, S may sue for price either as breach of SOG contract or on cheque being contract in itself; shld include provision that payment only occurs when cheque clears Payment by credit card usually treated as absolute payment; S cannot sue B Late payment: Law (Reform) Miscellaneous Provisions Act 1934 Late Payment of Commercial Debts (Interest) Act 1998 Late Payment of Commercial Debts Regulations 2013 EU provisions International provisions CISG 58 unless agreed, B must pay when goods placed at disposal, subject to examination; no provision for method; interest payable for late payment (Art. 78) UCC similar provision in Art 2-310; PICC all obligations must take place simultaneously unless agreed otherwise (6.1.4); payment may be in any (ordinary) form and cheque conditional on being honoured (6.1.7) PECL delivery should be rendered at same time as payment (7:104); payment may be ‘in any (ordinary) form and cheque conditional on being honoured (7:107); |
Extras | Action for price: Right of resale: |
DELIVERY |
‘Delivery’ | SGA 61 (1) ‘voluntary transfer of possession from one person to another’ Legal not physical delivery (transportation): point in time + space at which parties have agreed that legal right to possession of goods passes from S to B Delivery by S of goods to an independent carrier constitutes delivery to B (SGA 32(1)) |
Duty of S to deliver goods | UK provisions SGA 27 duty of S to deliver goods No general duty of S to transport goods to B; absent agreement, place of delivery is S’s place of business (SGA 29(2) Goods must comply with contract (implied condts. under s12, 13, 14 & 15 Failure B can reject goods | International provisions |
TITLE and RiSK | UK provisions Absent agreement, property passes when contract is made (SGA 18) (remember payment and delivery are ‘concurrent obligations’) Absent agreement, risk passes with ownership (SGA 20) | |
Duty of S to deliver RIGHT quantity | UK provisions B may reject goods if less (30 (1)) If greater, B may accept contract quantity + reject rest, or may reject whole (s30 (2)); if B accepts whole, must pay for excess at contract rate (s30 (3)) B not obliged to accept delivery in instalments (30 (1)) | International provisions |