UCC § 2-305
Open Price Term
(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 cancelled 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.
Professor's notes
Section 2-305 allows parties to form a binding contract for the sale of goods even though they have not fixed the price. If the parties intend to be bound and price is left open, the price is a reasonable price at the time of delivery. If one party is given power to fix the price, that power must be exercised in good faith. If the parties intended not to be bound unless a price was agreed and no price is agreed, there is no contract.
The doctrinal move is to separate intent to be bound from certainty of terms. The common law traditionally required that all material terms be definite before a contract could be enforced. Section 2-305 deliberately relaxes that requirement for goods contracts: the UCC fills the price gap with a reasonable-price standard rather than invalidating the deal. This reflects Llewellyn's view that sophisticated commercial parties often leave terms open intentionally.
Paradigm for § 2-305 enforcing the deal: A, a wholesaler, and B, a retailer, agree that B will buy A's stock of widgets on a "market price on delivery" basis. No dollar figure is named. The parties have committed. At delivery, B owes the reasonable market price. Paradigm for no contract: the parties' communications show they both understood no binding deal existed until they agreed on a price and they never did.
Students trained on common law contract formation often assume open price means no contract. Chapter 4 uses § 2-305 to illustrate the UCC/common-law gap on definiteness. Ask: what would the result be under common law if these were not goods? Then ask what the UCC changes and why. The answer opens the question of whether the R2d § 33's "reasonable certainty" standard effectively converges with § 2-305 or remains more demanding.
Connect to UCC § 2-306 (output and requirements contracts — another case where quantity or price is not fixed at formation), R2d § 33 (certainty required for contract formation), and the Chapter 4 materials on offers and definiteness, including Leonard v. Pepsico's treatment of indefiniteness as a defense.
Text
UCC § 2-305. Open Price Term.
(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 cancelled 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.
Source: UCC Article 2 (post-2022 amendments), as in the LawJ statutory corpus.