Quality Metals Company and Superior Fabrication, Inc., enter into a contract under which Quality Metals agrees to deliver a certain quantity of sheet metal to Superior Fabrication each month. The contract does not include a price term. In a suit between the par?ties over the price, a court will
A) determine a reasonable price.
B) impose the lowest market price.
C) impose the highest market price.
D) return the parties to the positions they held before the contract.

Question

Quizplus · Accepted Answer

In the absence of a price term, a court will typically determine a reasonable price based on factors such as industry standards, past prices, and other relevant circumstances. The court will look to the intent of the parties and try to give effect to their agreement, even if it is not fully spelled out in the contract. Imposing the lowest or highest market price would be unlikely unless there is evidence that the parties intended this outcome. Returning the parties to their pre-contract positions would not be practical or desirable in most cases.