A contract price is the price specified in a contract for the sale of goods. The price specified in the contract is the price that the seller must sell goods for to the buyer. It is one of the material, or key, terms in a contract for the sale of goods.
A contract is a formal legal promise between two parties. In other words, it is a promise that can be enforced in a court of law if one party fails to live up to the deal. When one party reneges, or "breaches" the contract, the other party can take him to court in order to collect damages.
A contract for the sale of goods is a special type of contract that relates to buying and selling items. In a contract for the sale of goods, the contract price is a material fact or item. This means it is essential to the contract and is an important contract term.
Under traditional common law, a contract for the sale of goods has to stipulate a contract price. If a contract for the sale of goods existed between two parties and does not specify a price, the contract is deemed invalid. This meant that the contract will not be enforced by a court of law unless a price is explicitly specified in the contact.
According to the Uniform Commercial Code, which governs contracts for the sale of goods in most jurisdictions in the United States, the contract price is also used to determine damages in the event of a breach. This means that when one party breaches the contact, the court will look at the price of the goods specified in the contract to determine the damages that the other party should pay. Damages in this situation are always monetary damages.
Damages are designed to put the injured party back into the situation that he or she would have been in if the breach had never occurred. When a contract for a sale of goods is breached, the injured party either is unable to sell his goods or is unable to buy his goods according to the terms of the contract. Therefore, the damages incurred are those damages that the parties incurred as a result of this failure.
The damages are thus calculated by considering the contract price. If the seller breached, the buyer's damages are usually equal to the difference between what he ended up paying for the goods from another source and the price listed for the goods in the contract. If the buyer breached, the seller's damages are usually equal to the difference between what he ended up selling the goods for and the price listed in the contract.