Jedco Wholesalers Ltd.and BigGrocer Inc.have agreed that Jedco will supply BigGrocer with 400 kilos of watermelon when the crop is harvested.Rather than agree on a set price,they have agreed that the price of the watermelon will be based on the cost of the watermelon to Jedco plus 25 percent.Would this contract be enforceable in court?
A) Yes,because it is not necessary to set out final price in the contract as long as the price can be determined in some way,for example,by a formula.
B) No,because price is an essential term,and the parties have not clearly expressed the final price in their contract.
C) Yes,because parties have agreed to a formula that will produce a reasonable price.
D) No,because price must be decided at the time the contract is entered into and cannot be determined at a future date.

Question

Quizplus · Accepted Answer

The contract is enforceable because the price can be determined through a formula agreed upon by the parties, which is a valid method for setting a price in a contract.