Neeraj entered in a contract with Rahul to purchase 1000 litres of mustard oil at the price which should be fixed by Aakash. Rahul already delivered…

By virtue of Section 9 of the Sale of Goods Act, 1930, the price in the contract of sale may be fixed by the contract, or agreed to be fixed in a manner provided by the contract, e.g., by a valuer, or determined by the course of dealings between the parties. Further, section 10 provides for the determination of price by a third party in the following manner: (a) Where there is an agreement to sell goods on the terms that price has to be fixed by the third party and he either does not or cannot make such valuation, the agreement will be void. (b) In case the third party is prevented by the default of either party from fixing the price, the party at fault will be liable to the damages to the other party who is not at fault. (c) However, a buyer who has received and appropriated the goods must pay a reasonable price for them in any eventuality. In the instant case, Neeraj contracted Rahul to purchase 1000 litres of mustard oil at the price fixed by Aakash. After, Rahul delivered 600 litres Aakash denied fixing the price of mustard oil. Rahul demanded back the oil already delivered and cancel the delivery of 400 litres. Neeraj sued Rahul for non-delivery of remaining 400 litres mustard oil. On the basis of above provisions and facts, Neeraj is liable to pay a reasonable price of 600 litres while for remaining 400 litres, contract may be avoided.