Do the parties have a contract? If so, what is the price? Explain.

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Do the parties have a contract? If so, what is the price? Explain.

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Courts Distributors needed two hundred compact refrigerators on a rush basis. It contacted Eastinghouse Corporation, a manufacturer of refrigerators. Eastinghouse said it would take some time to quote a price on an order of that size. Courts replied, “Send the refrigerators immediately and bill us later.” The refrigerators were delivered three days later and the invoice ten days after that. The price was $140,000. The Court believes that the wholesale market price of the refrigerators is only $120,000. Do the parties have a contract? If so, what is the price? Explain.

Explanation & AnswerSolution by a verified expert

Explanation

The judgment may be in favor of the buyer. This judgement may be dependent on how the contract fixed the price of the product based on a market standard, which was not fixed at the time of the agreement.
The judgment could be in favor of the seller if the seller could prove that they had to incur extra costs due to the shortage of time to complete the contract, which makes the price reasonable.

Verified Answer

The validity of the contract depends on the reasonableness of the price as per the time and place of delivery of the products.

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