Definition
Average prices are prices computed by aggregating all recorded transaction prices for a given commodity, good, or article within a defined period or geographic district and expressing them as a collective figure — typically a mean — representative of market conditions during that interval. The concept is inherently statistical: no single sale price qualifies as an "average price" in isolation. Rather, the term describes what the market, taken as a whole across a sample of transactions, was bearing at a relevant time.
In commercial and contract law, average prices function as an objective benchmark for determining market value, measuring damages, and pricing obligations where parties have not fixed a precise price. Under UCC Article 2, market price at the time and place of tender or breach is the operative measure for computing damages when a buyer covers or a seller resells — and establishing that market price in litigation typically requires evidence of average prices drawn from trade publications, commodity exchanges, or industry indices.
In admiralty and maritime law, the term intersects with general average adjustment, where the value of cargo and vessel contributions must be assessed against prevailing market prices at the voyage's termination point.
In regulatory and antitrust contexts, average prices serve as evidence of competitive or monopolistic market behavior — artificially suppressed or inflated average prices within a district can signal price-fixing or predatory pricing.
Common Language
Modern common usage (Wiktionary): "Average price" in ordinary speech means the typical or middle price of a thing — what something generally costs, often computed simply as the arithmetic mean of several observed prices.
Historical common usage (Webster's 1913): Webster's 1913 does not carry a discrete entry for "average prices" but treats "average" broadly as a mean proportion or medium value derived from a set of quantities.
The gap between common and legal meaning is narrower here than with many legal terms, but it matters: in law, "average prices" is not merely descriptive of a rough middle figure. It carries evidentiary weight as an objective market standard computed across all transactions within a defined period or district — not a casual estimate or a single representative price. When average prices are introduced in litigation, courts expect methodological rigor: what transactions were sampled, over what period, and in what geographic market.
Why It Matters in Research
The principal research trap with "average prices" is treating it as a self-defining arithmetic concept when it is, in legal contexts, a term of art whose probative value depends entirely on how the average was constructed. Researchers working in contract damages cases — particularly UCC breach-of-contract disputes — will find that "market price" and "average prices" are often used interchangeably in older sources, but they are not identical. Market price at a specific moment differs from an average computed across a period.
Historical sources, including early editions of Black's, define average prices almost exclusively in the commodity-trade context — grain, cotton, and similar fungible goods where regional price tables were maintained by trade boards or government bureaus. Researchers reading 19th- and early 20th-century commercial cases should be alert to this commodity-centric framing; the concept has since expanded to cover any goods or services whose pricing can be documented across multiple transactions.
In admiralty research, "average prices" appears in cargo valuation disputes under general average adjustment. The York-Antwerp Rules govern how cargo values are assessed for contribution purposes, and the relevant "price" is typically the market price at destination — itself often established by reference to average prices in that port's trading records.
Researchers using Law Mind's corpus should cross-reference average prices with "market price," "fair market value," and "cover price" depending on the legal context. In antitrust and regulatory materials, look for "benchmark price" and "reference price" as functional equivalents in more recent sources.
Historical Dictionary Support
Black's Law Dictionary defines average prices concisely as those "computed on all the prices of any articles sold within a certain period or district." This definition is precise in its core logic — all prices, defined period, defined district — and reflects the evidentiary function the term served in 19th-century commercial litigation, where commodity markets were the paradigm case.
What Black's does not address is the methodological dimension: how courts evaluate competing average-price calculations when parties offer different figures, or how the relevant "district" is defined for purposes of establishing market price in a damages calculation. These questions, now central to commercial litigation and antitrust analysis, are resolved by case law and economic expert testimony rather than dictionary definition. Historical dictionaries are uniformly silent on this gap.
No significant divergence exists among historical dictionaries on the core meaning, which is unsurprising given the term's essentially statistical character. The evolution worth noting is one of scope: the commodity-market framing of the 19th century has given way to a far broader application across industries and regulatory contexts.
Encyclopedia Cross-Reference
The Law Mind Contracts & Commercial Law Encyclopedia — UCC Article 2: Cover and Market Price Damages
The Law Mind Military, Veterans & Admiralty Law Encyclopedia — General Average: York-Antwerp Rules, Contribution, and Adjustment
The Law Mind Real Estate Transactions & Construction Encyclopedia — Construction Contract Pricing: Fixed-Price, Cost-Plus, GMP, and Unit Price