Sale of Goods Act Section 10 — Agreement to sell at valuation
CHAPTER II FORMATION OF THE CONTRACT — The price
Commercial / Corporate
Summary
Sub-section (1) covers a deal to sell goods where the price is to be set by a third party's valuation. If that third party cannot or does not make the valuation, the agreement is cancelled. However, if the goods, or any part of them, have already been handed over to the buyer and kept by the buyer, the buyer must pay a reasonable price for them.
The proviso to sub-section (1) states that when goods have been delivered to and taken by the buyer, the buyer is still required to pay a fair amount for those goods, even though the agreed valuation never happened.
Sub-section (2) deals with a situation where the third party is stopped from making the valuation because of the fault of either the seller or the buyer. In that case, the party who is not at fault can file a lawsuit for damages against the party who caused the problem.
Official Text
(1) Where there is an agreement to sell goods on the terms that the price is to be fixed by the valuation of a third party and such third party cannot or does not make such valuation, the agreement is thereby avoided:
Provided that, if the goods or any part thereof have been delivered to, and appropriated by, the buyer, he shall pay a reasonable price therefor.
(2) Where such third party is prevented from making the valuation by the fault of the seller or buyer, the party not in fault may maintain a suit for damages against the party in fault.