Explanation of Article 314
The article addresses the provisions of sale at market price and assumes three scenarios for the agreement of the contracting parties on the sale at market price:
The first scenario: The contracting parties agree to choose a specific market at a specific time to be the basis for determining the price between them; the sale is valid, and that market is the reference for determining the price. This is as if they agree that the sale will be at the market price at the time and place where the sold item must be delivered.
The second scenario: The contracting parties agree that the price is the market price, but they did not specify a particular market or a specific time; the article clarifies that the price considered is the market price at the time and place where the sale contract was concluded, as outlined in Article (38). Considering the market price at the time and place of the sale is more appropriate than what some laws have adopted by considering the time and place of delivery of the sold item, because the price becomes due in the buyer's obligation by the contract, not by the delivery of the sold item.
The third scenario: The contracting parties agree that the price is the market price, but they did not specify a particular market, and there is no market at the place of sale that can be a valid basis for determining the price; for instance, if the sale is in the desert or in a village where such goods are not sold, the article clarifies that what is considered in this case is the place where custom dictates that its prices are applicable, and it is usually the nearest market to the place of sale.
Related To
Article 314
If the contracting parties agree to determine the sale price based on the market price, the market price shall be determined according to the time and place of sale. If no market exists at the place of sale, reference shall be made to the place where the prices of its market are deemed applicable according to custom.