O.C.G.A.
O.C.G.A.

O.C.G.A. § 11-2-305 (2019)

Open price term

✓ O.C.G.A. — 2019 edition (Public.Resource.Org Release 73)
Code text and O.C.G.A. statutory annotations on this page reflect the 2019 Official Code of Georgia Annotated (Public.Resource.Org Release 73, 2019-08-21; public domain per Georgia v. Public.Resource.Org, 2020). The Syfert case-law annotations in Notes of Decisions, below, are current.
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(1) The parties if they so intend can conclude a contract for sale even though the price is not settled. In such a case the price is a reasonable price at the time for delivery if: (a) Nothing is said as to price; or (b) The price is left to be agreed by the parties and they fail to agree; or (c) The price is to be fixed in terms of some agreed market or other standard as set or recorded by a third person or agency and it is not so set or recorded. (2) A price to be fixed by the seller or by the buyer means a price for him to fix in good faith. (3) When a price left to be fixed otherwise than by agreement of the parties fails to be fixed through fault of one party the other may at his option treat the contract as canceled or himself fix a reasonable price.

(4) Where, however, the parties intend not to be bound unless the price be fixed or agreed and it is not fixed or agreed there is no contract. In such a case the buyer must return any goods already received or if unable so to do must pay their reasonable value at the time of delivery and the seller must return any portion of the price paid on account.

History

Code 1933, § 109A-2-305, enacted by Ga. L. 1962, p. 156, § 1; Ga. L. 2002, p. 415, § 11.

Annotations

Law reviews. For article, “Contract Litigation and the Elite Bar in New York City, 1960-1980,” see 39 Emory L.J. 413 (1990).

JUDICIAL DECISIONS Editor’s notes. - In light of the similarity of the statutory provisions, decisions under former Code 1933, § 96-101 are included in the annotations for this Code section. Necessity to show agreement on price. - Contract, if otherwise sufficient, need not show that there has been an agreement on price. Jackson v. Meadows, 153 Ga. App. 1, 264 S.E.2d 503, 1980 Ga. App. LEXIS 1650 (1980). If contracts do not specify price, O.C.G.A. § 11-2-305 requires that price be “reasonable.” Spartan Grain & Mill Co. v. Ayers, 517 F.2d 214, 1975 U.S. App. LEXIS 13220 (5th Cir. 1975). Price is not absolutely essential in contract for sale of goods. Peach State Meat Co. v. Excel Corp., 860 F. Supp. 849, 1994 U.S. Dist. LEXIS 11020 (M.D. Ga. 1994). Contract to sell water at fixed price. - O.C.G.A. § 11-2-305 comes into play only where a contract for sale is concluded with an open-price term. Where water is offered for sale by a city at a fixed price and nonresident plaintiffs accept the offer at that fixed price, it cannot be said that the city sells water to plaintiffs pursuant to an open price term contract. Zepp v. Mayor of Athens, 180 Ga. App. 72, 348 S.E.2d 673, 1986 Ga. App. LEXIS 2058 (1986).

Proof of price necessary to prove case concerning indebtedness. - Price was one essential of contract for sale of goods giving rise to alleged indebtedness, which was denied by defendant in its answer, and proof of price, as amount sued for, was necessary to prove case as alleged; where evidence was insufficient to establish that defendant owed plaintiff any definite amount, as contract price of goods or as market value of goods, nonsuit was proper. Wolfe v. Brown-Wright Hotel Supply Corp., 87 Ga. App. 12, 73 S.E.2d 82, 1952 Ga. App. LEXIS 600 (1952) (decided under former Code 1933, § 96-101). Good-faith safe harbor applied in petroleum distribution. - When plaintiff jobber petroleum distributors’ only allegations of wrongdoing was defendant oil company’s purported recapture of the cost of a prompt-pay discount when setting its price, and the parties’ contract imposed no limits on the costs that could be recouped in setting the price, the good-faith safe harbor provided in O.C.G.A. § 11-2-305(2) applied; O.C.G.A. § 11-2-103 did not support imposing fundamental substantive limitations on the pricing methodology set out in the contract. Autry Petroleum Co. v. BP Prods. North America, Inc., 334 Fed. Appx. 982, 2009 U.S. App. LEXIS 13978 (11th Cir. 2009).

RESEARCH REFERENCES Am. Jur. 2d. 67 Am. Jur. 2d, Sales, §§ 213-223. Am. Jur. Pleading and Practice Forms. 6 Am. Jur. Pleading and Practice Forms, Commercial Code, § 2:107.

C.J.S. 77A C.J.S., Sales, § 94 et seq. U.L.A. Uniform Commercial Code (U.L.A.) § 2305.

ALR. Construction of “cost plus” contracts, 2 A.L.R. 126; 27 A.L.R. 48. Validity and enforceability of contract which expressly leaves open terms of payment for future negotiation, 49 A.L.R. 1464. Sale agreement fixing price at resale price less specified per cent as indefinite, 57 A.L.R. 747. Validity of contract which leaves amount to be paid in performance thereof to promisor’s determination, 92 A.L.R. 1396.

Validity of sales contract as affected by provision therein giving buyer power to control price to be paid for goods, 49 A.L.R.2d 508. Construction and application of UCC § 2-305 dealing with open price term contracts, 91 A.L.R.3d 1237. Electricity, gas, or water furnished by public utility or alternative supplier as “goods” within provisions of Uniform Commercial Code, Article 2 on sales, 97 A.L.R.6th 1.

Notes of Decisions
Cited in 7 cases, 1985–2001 · leading case: Golden Peanut Co. v. Bass, 547 S.E.2d 637 (Ga. Ct. App. 2001).
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Golden Peanut Co. v. Bass, 547 S.E.2d 637 (Ga. Ct. App. 2001). · cites it 8× “Finally, Golden Peanut argues that the court erred in charging the jury on OCGA § 11-2-305 (3), which provides: “When a price left to be fixed otherwise than by agreement of the parties fails to be fixed through the fault of one party [,] the other may at his option treat the…”
Zepp v. Mayor & Council of Athens, 348 S.E.2d 673 (Ga. Ct. App. 1986). · cites it 6× “Second, they contend the contract between plaintiffs and the city for the purchase of water contains an open-price term which the city fixes unreasonably in violation of OCGA § 11-2-305.”
Zepp v. Mayor & Council of the City of Athens, 339 S.E.2d 576 (Ga. 1986). · cites it 2× “They also argue that the water-service agreement between them and the city is an open-price term contract which should be set aside under the UCC, OCGA § 11-2-305, because the city has not fixed the price in good faith.”
Billings Cottonseed, Inc. v. Albany Oil Mill, Inc., 328 S.E.2d 426 (Ga. Ct. App. 1985). · cites it 2× “Nor was an “open price term contract” created under OCGA § 11-2-305 (4), which provides that where “the parties intend not to be bound unless the price be fixed or agreed and it is not fixed or agreed there is no contract.”
Wall v. City of Athens, Ga., 663 F. Supp. 747 (M.D. Ga. 1987). · cites it 2× “, O.C.G.A. § 11-2-305 (1982), because the city had not fixed the price in good faith.”
Lansdown Investments of Georgia, Inc. v. Wilson, 370 S.E.2d 666 (Ga. Ct. App. 1988). · cites it 2× “(See OCGA § 11-2-305, with regard *501 to plaintiffs right to recover the “reasonable price” of the materials absent a specific agreement as to price.”
Peach State Meat Co. v. Excel Corp., 860 F. Supp. 849 (M.D. Ga. 1994). · cites it 2× “Plaintiff complains that Excel is seeking to avoid their contractual obligation by “quibbling” with the terms of the contract. The court is required to apply the law as it finds it to the facts as presented by the parties.”
— 11-2-305(3) — 1 case
Golden Peanut Co. v. Bass, 547 S.E.2d 637 (Ga. Ct. App. 2001). “Finally, Golden Peanut argues that the court erred in charging the jury on OCGA § 11-2-305 (3), which provides: “When a price left to be fixed otherwise than by agreement of the parties fails to be fixed through the fault of one party [,] the other may at his option treat the…”
Annotations are extracted automatically from the opinions in the Syfert caselaw corpus and ranked by authority, recency, and treatment. Dots show Syfertize treatment of the citing case itself.