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Report to the Uniform Law Conference of Canada on Convention on Contracts for the International Sale of Goods

Professor Jacob S. Ziegel, University of Toronto
July 1981

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Article 55

Where a contract has been validly concluded but does not expressly or implicitly fix or make provision for determining the price, the parties are considered, in the absence of any indication to the contrary, to have impliedly made reference to the price generally charged at the time of the conclusion of the contract for such goods sold under comparable circumstances in the trade concerned.

COMMENT

1. Art. 55 must be read in conjunction with art. 14 which deals with the essential constituents of an offer. Art. 55 was substantially amended at Vienna. The adopted version attempts to reconcile the price requirements of art. 14 with the need to provide for a case where the contract contains no reference to the price, and does so by deeming the parties to have impliedly agreed to adopt the price generally charged for such goods at the time of the conclusion of the contract. It is not clear whether this formula is sufficient to overcome the limitations of art. 14, although it was clearly meant to. Difficulties may still be encountered because art. 55 does not come into play unless a contract has been validly concluded. Further, art. 55 fails to state how the price is to be determined where the seller is the only supplier of the goods (e.g., of a new type of computer or a new drug): presumably the seller's price is to be implied unless the price is clearly unreasonable. Note too that, under art. 55, it is the price obtaining at the time of the conclusion of the contract and not at the time of delivery that will be applied in the absence of contrary agreement.

2. OSGA s.9 corresponds to art. 55. The cases show that OSGA s.9 is incomplete since it does not apply where the agreement provides that the price is to be fixed by agreement at a later date and no provision is made for fixing it if the parties fail to agree. In such a case the prevailing Anglo-Canadian view appears to be that there is no binding agreement. Cf. May & Butcher Ltd. v. R. (1934) 2 K.B. 17n with Foley v. Classique Coaches, Ltd. (1934) 2 K.B. 1. It is not clear whether the same result will be reached under arts.14 and 55. It should be open to a court to find (as, for example, UCC 2-305(1) authorizes it to do) that the parties intended a reasonable price to apply where they failed to reach agreement on a price, and there appears to be nothing in CISG to preclude a tribunal from adopting this flexible approach.

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Pace Law School Institute of International Commercial Law - Last updated April 23, 1999
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