Definition
The consideration given in exchange for the purchase of property or goods. Although price is most commonly expressed in money, the term is not inherently limited to monetary consideration — it extends to any equivalent given in exchange for a thing sold. What distinguishes price from value is that price is the actual amount agreed upon between buyer and seller in a specific transaction, while value is the worth attributed to a thing independent of any particular exchange.
In contract law, price is a material term of a sale. For a price to be legally operative, it must satisfy certain threshold requirements: it must be real and not illusory, it must be determinate or capable of determination, and it must be the actual consideration bargained for in the transaction — not a nominal or pretextual figure.
In commercial law under the UCC, price is treated with greater flexibility. A contract for the sale of goods may be enforceable even where the price is not fixed at formation, provided the parties intend to make a contract and a price can be determined by reference to a reasonable standard, market price, or prior dealings.
Common Language
Modern common usage (Wiktionary): The cost required to gain possession of something; the cost of an action or deed; value, estimation, or worth.
Historical common usage (Webster's 1913): The sum or amount of money at which a thing is valued, or the value which a seller sets on his goods in market; that for which something is bought or sold; equivalent in money or other means of exchange.
The common meaning of price collapses it with value — treating what something costs and what it is worth as roughly equivalent. Legal meaning sharply separates the two. Price is a transactional fact; value is an independent assessment. Inadequacy of price (paying far below value) has distinct legal consequences — it does not automatically void a contract, but may serve as evidence of fraud or undue influence depending on degree. A researcher who treats price and value as interchangeable will misread case law discussing whether inadequacy of price constitutes grounds for rescission or specific performance.
Common Confusion
PRICE vs. VALUE: The most persistent confusion in both historical sources and modern research. Price is what was agreed upon in a specific transaction. Value is what the thing is actually worth, determined objectively or by market conditions. Historical sources, including older editions of Black's, sometimes slide between the two without signaling the shift. Courts have held repeatedly that inadequate price alone is not a ground to set aside a sale — the legal standard requires something more, such as fraud, misrepresentation, or unconscionability — but evidence of a grossly inadequate price may contribute to such a finding.
PRICE vs. CONSIDERATION: Related but not synonymous. Consideration is the broader contract law concept — the thing bargained for in exchange, which may include acts, forbearances, or promises. Price is consideration specific to a sale transaction, usually but not exclusively monetary. All prices are consideration; not all consideration is a price.
Core Elements
For a price to be valid and operative in a sale transaction, historical authorities (particularly Bouvier) identify three requirements:
1. SERIOUS: The price must be genuine and intended to be enforced. A nominal or sham price that is immediately forgiven by the seller by prior agreement undermines the character of the transaction as a true sale.
2. DETERMINATE OR DETERMINABLE: The price must either be fixed at the time of agreement or capable of being fixed by reference to an external standard. An agreement that provides no mechanism for determining price may fail for indefiniteness, though the UCC relaxes this standard for goods transactions.
3. GIVEN IN EXCHANGE: Price must function as the actual consideration for the transfer of property — not as a gift, a settlement of an existing claim (accord and satisfaction), or a return of the subject matter itself (bailment).
Why It Matters in Research
Researchers should approach price carefully across three recurring contexts:
SALE VALIDITY: Cases involving challenges to completed sales — particularly in equity — turn heavily on whether price was adequate and genuine. Historical courts drew distinctions between inadequacy of price as (a) no ground to void a sale, (b) evidence of fraud, or (c) grounds to deny specific performance in equity. These distinctions were live and contested across 19th-century case law. Rapalje & Lawrence's entry hints at this doctrinal complexity without resolving it, pointing researchers toward underlying cases rather than providing a synthesis.
UCC CONTEXT: Under Article 2 of the Uniform Commercial Code, the treatment of price diverges meaningfully from common law doctrine. Open-price terms, output and requirements contracts, and the cover/market price damages framework all require understanding price as something measured against objective market standards, not merely the parties' agreement. Researchers working in commercial sales disputes must distinguish between contract price and market price — the gap between the two is often the measure of damages.
CONSTRUCTION CONTRACTS: In construction and real estate transaction research, price takes on additional complexity. Fixed-price, cost-plus, guaranteed maximum price (GMP), and unit price contracts each define price differently and generate distinct disputes over scope changes, overruns, and pricing adjustments. The term price in a construction context carries contractual architecture that is invisible in general contract or sale-of-goods materials.
HISTORICAL TRAP — MONEY RESTRICTION: Historical dictionary entries (Rapalje & Lawrence in particular) define price as "the money value given on the purchase of a thing" — an overly narrow formulation that the better authorities, including both editions of Black's and Anderson's, explicitly correct. A researcher relying on Rapalje's definition without checking the broader authorities may conclude that barter or non-monetary consideration cannot constitute a price in a valid sale, which is incorrect.
Historical Dictionary Support
The historical sources agree on the core: price is the consideration given for the purchase of a thing, most often money, but not necessarily so. Both editions of Black's make the same corrective move — noting that price is generally expressed in money only because property is generally sold for money, not because the word is inherently so limited. Anderson's echoes this analysis directly, citing Commonwealth v. Howe for the proposition.
Bouvier adds the most analytical depth, articulating the three requisites for a valid price and drawing the contrast between price and related legal concepts — accord and satisfaction, bailment, and value. The distinction from value is particularly important: Bouvier flatly states that price is not synonymous with value, a point that several other sources blur.
Rapalje & Lawrence is the thinnest entry, offering a bare definition followed by citation strings. It flags procedural contexts (declarations, indictments, statutes) where price has appeared as a term of art, which can be useful for historical pleading research, but provides no doctrinal synthesis.
What the historical sources largely miss is the modern commercial law treatment of price under the UCC — the open-price term doctrine and the market-price damages framework are entirely post-codification developments that do not appear in any of the shelf sources.
Jurisdictional Note
The UCC's treatment of open-price terms and market-price damages is substantially uniform across adopting states, but states vary in their pre-UCC common law background rules, which continue to govern non-goods transactions. In equity contexts — particularly challenges to sales on grounds of inadequate price — state courts continue to apply divergent standards for how far below value a price must fall before it contributes to a finding of fraud or grounds for rescission.
Encyclopedia Cross-Reference
UCC Article 2 — Cover and Market Price Damages (The Law Mind Contracts & Commercial Law Encyclopedia)
Construction Contract Pricing — Fixed-Price, Cost-Plus, GMP, and Unit Price (The Law Mind Real Estate Transactions & Construction Encyclopedia)
Change Orders — Directive Changes, Constructive Changes, and Pricing Disputes (The Law Mind Real Estate Transactions & Construction Encyclopedia)