Price is usually the basic term, specified in most contracts. When entering into a contract, the parties pay close attention to the price, especially the seller or the service provider because this party always wants to earn a profit. However, for various reasons, the parties may not agree or agree unclearly on the price. So, what basis are the parties to determine the price in this case if there is no agreement on the price in the contract
1. Contract price
Price is understood as the monetary expression of the goods and services value that the parties agree in a contract, or a third party determines based on the quality, historical value, and utility… of the goods or services. Price is the basis for the parties to perform the contract, so if the parties do not agree or agree unclearly on the price, it will affect the contract performance process and lead to disputes.
2. Determine the price when there is no agreement on the price in the contract
i) Regarding the sale of goods contract
- Article 52 of Commercial Law 2005 stipulates that in case there is neither agreement on goods price or the price-determining method nor other price indexes, the goods price shall be determined according to the price of such type of goods under similar conditions of delivery, time of sale, geographical market, payment method, and other conditions which affect the prices.
- Article 433.2 of Civil Code 2015 also stipulates that in case the parties reach no agreement or reach an agreement with unclear terms about price and method of payment, the price shall be determined according to the market price.
ii) Regarding the service contract
- Article 86 of Commercial Law 2005 stipulates that where there is no agreement on service charge rate, no agreement on methods of determining service charge rate, and also there is not any indication to service charge rate, the service charge rate shall be determined according to the charge rate of the same type of service under similar conditions on the mode of provision, time of provision, geographical market, mode of payment and other conditions which can affect the service charge rate.
- Article 519.2 of Civil Code 2015 also stipulates that there is no agreement on the service fee rate or on the method for fixing the fee for services and there are no other instructions on fees, the service fee rate shall be fixed based on market fees for services of the same type at the time when and place where the contract was entered into.
3. The solution in case the parties reach no agreement on the price
- The parties should prioritize the negotiation and renegotiation of the price. To determine the most appropriate price of goods and services, the parties should determine based on the content of Part 2 of this article. In addition, the parties can find a third party to assist in valuation such as experts in the disputed field, price appraisers, valuation practice companies, etc.
- In case it is not possible to negotiate or reach an agreement about the price, one of the parties may initiate a lawsuit to request a competent court to settle the dispute according to the following procedures:
– Step 1: One of the parties initiates a lawsuit at a competent court;
– Step 2: After the Court accepts the case for settlement, the party or the parties submit a petition to the Court to issue a decision on asset price determination;
– Step 3: The court receives the request for valuation and makes decisions on property price assessment and set up the Price Assessment Council;
– Step 4: The Price Assessment Council conducts the valuation;
– Step 5: After the asset valuation process, the Price Assessment Council makes a minute and concludes the asset valuation.
Note: One or both parties are required to pay property valuation expense advances, and property valuation expenses according to the laws.
4. Notes on price valuation before entering into a contract
- Need to agree and specify the price terms in the contract;
- Determine whether the subject matter of the contract is subject to the law on price. If so, the parties need to comply with this price to take effect;
- During the valuation process, the parties can consult the market price, and opinions of individuals, agencies, and organizations with expertise in the field in which the parties sign the contract;
- The parties must not take advantage of the conclusion of the contract, pushing the price up for money laundering. This is a violation of the law and can be punished under criminal law.
Above is the article “Solutions when there is no agreement on the price in the contract”. We hope this article was useful to you.