The priceCentral

Section 9 of The Sale of Goods Act, 1930

(1)The price in a contract of sale may be fixed by the contract or may be left to be fixed in 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 shall pay the seller a reasonable price. What is a reasonable price is a question of fact dependent on the circumstances of each particular case.

Summary

This section explains the different ways a price can be set for a sale.
The most direct way is for the buyer and seller to write the price into the contract itself.
Parties can also agree on a specific method or process to figure out the price later.
If the parties have done business before, the price can be decided based on how they usually dealt with each other.
If no price or method is agreed upon, the law requires the buyer to pay a reasonable price.
Whether a price is reasonable depends on the specific facts and situation of that particular case.

Practical examples

1Alice and Bob sign a contract for 100 bags of flour on August 1st. They state the price is 2,000 rupees. This is a price fixed by the contract under Section 9.

2A restaurant orders fresh fish every Monday from the same supplier for three years without discussing the price each time. On September 10th, the supplier sends a bill based on the usual market rate they always use. This price is determined by the course of dealing under Section 9.

FAQ

1. How is the price determined under Section 9 of The Sale of Goods Act, 1930 if the contract is silent?

Under Section 9 of The Sale of Goods Act, 1930, if the price is not fixed or determined by an agreed method or past dealings, the buyer must pay a reasonable price.

2. Who decides what a reasonable price is according to the Sale of Goods Act, 1930, Section 9?

According to Section 9 of the Sale of Goods Act, 1930, what constitutes a reasonable price is a question of fact that depends on the circumstances of each case.

3. Can the price be decided after the contract is made under Section 9 of the 1930 Act?

Yes, Section 9 of the Sale of Goods Act, 1930 allows the price to be left to be fixed in a manner agreed upon in the contract or determined by the history of dealings between the parties.

Test yourself

Q1.Under Section 9 of The Sale of Goods Act, 1930, which of the following is NOT a mentioned way to fix the price?

Q2.If the price cannot be determined by the contract or past dealings, what does Section 9 of the Sale of Goods Act, 1930 require the buyer to do?

Q3.According to Section 9 of The Sale of Goods Act, 1930, what determines if a price is reasonable?

Q4.Under Section 9 of the Sale of Goods Act, 1930, course of dealing refers to:

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