When a contract for the sale of goods lacks a price term, which method determines the price?

• A. The price may be determined by the court
• B. The price is fixed at the date of contract
• C. The price is determined by the market price at the time of delivery
• D. The price is determined by the seller

Answer: (C)

When a contract for the sale of goods leaves the price term open, the price is determined by the market price at the time of delivery. This default fills the gap so the contract isn’t unenforceable and reflects the going value of the goods when they’re delivered. The market price is the price at which such goods are actually available in the relevant market at that moment, not a price set by the court or by the seller unilaterally, and it isn’t fixed at the contract date unless the parties agreed to that. If there were no market price available, a reasonable price at delivery could be used, but the standard default is the market price at delivery.