If a contract for goods lacks a price term, the price term is typically supplied by the market price at delivery. What is the effect on risk of price fluctuations?

• A. The market price at delivery determines the price
• B. The seller bears all price risk regardless of market
• C. The buyer bears all price risk regardless of market
• D. The contract is void if price cannot be determined

Answer: (A)

When a price term is missing, the price is set by the market price at the time of delivery. This means the amount paid depends on the going price then, not on a fixed pre-agreed amount. The buyer bears the risk of price fluctuations because they will pay whatever the market price is at delivery—if prices rise, the buyer pays more; if they fall, the buyer pays less. The seller simply receives the market price at delivery and isn’t locked into a fixed price. The contract isn’t void just because price isn’t fixed—the market price at delivery determines it.