Problems needing attention in adopting non fixed p

2022-08-26
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[commodity price] - problems needing attention in adopting non fixed price terms

in order to reduce the unstable factors brought to the contract by the terms of advanced chemical materials such as high-end resins, special rubber and engineering plastics with non fixed prices, eliminate the contradictions between both parties in pricing, and clarify that the conclusion of pricing standards is an important and essential premise, and the pricing standards can be stipulated according to different commodities as appropriate. For example, the published price of a commodity transaction shall prevail, or the price of an international market shall prevail

2. Specify the pricing time

the following methods can be used to determine the pricing time:

A) pricing before shipment. Generally, it is stipulated that the price of all measurement and control systems will be priced with higher accuracy several days after the contract is signed or several days before shipment. Using this analytical 0.001mm (optional) pricing method, both parties to the transaction still have to bear the risk of price changes from pricing to payment for resale

b) pricing at the time of shipment. Generally, it refers to the average price of the market on the date of the bill of lading or the month of shipment. In fact, this practice can only be carried out after shipment. Unless there is a clear and objective pricing standard, the seller will not easily adopt it because he is afraid of taking risks

c) pricing after shipment. Generally, it refers to pricing several days after shipment, or even after the ship arrives at the destination. If such practices are adopted, the seller will bear greater risks, so they are generally rarely used

3. The influence of non fixed price on the establishment of the contract

the elongation of some materials can be above 1000%. In the case of non fixed price, because both parties have not agreed on the main condition of the contract - price, there is a problem whether the contract signed in this way is valid. At present, the laws of most countries believe that the contract is effective as long as it stipulates the pricing method, and some national laws even believe that the contract price can be left to be determined by the customary transaction method established by both parties in the future. The United Nations Convention on Contracts for the international sale of goods allows the contract to only stipulate "how to determine the price", but there is no individual provision or further explanation for "how to determine the price". In order to avoid disputes and ensure the smooth performance of the contract, when using a non fixed price, the pricing method should be clearly and specifically stipulated as far as possible

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