Contracts and Sales Multistate Bar Practice Exam

What price does the UCC provide for missing price terms in a contract?

1. Fixed price agreed upon later

2. Price based on market value

3. Reasonable price at time of delivery

4. Lowest price available

The correct answer is: Reasonable price at time of delivery

The Uniform Commercial Code (UCC) provides that if a contract for the sale of goods does not specify a price, the price will be determined as a reasonable price at the time of delivery. This provision offers flexibility and ensures that the parties can still enforce the contract even if they did not agree on a specific price beforehand. This approach helps avoid disputes regarding price and aligns with the intention of the parties to create a binding agreement for the sale. Using a reasonable price at the time of delivery takes into account market fluctuations and the current circumstances surrounding the goods at the time they are to be delivered. This is particularly helpful in commercial transactions where market conditions can change rapidly, ensuring that the seller receives fair compensation and that the buyer is paying a price that reflects the market conditions at that time. Other options such as a fixed price agreed upon later or a price based on market value might not provide the same level of certainty and enforceability in a situation where no price is established upfront. Additionally, the idea of the lowest price available does not align with the UCC's emphasis on establishing a reasonable price, which takes into account fairness and current market conditions at the time of delivery rather than just finding the cheapest alternative.