X' agrees to sell his 100 bags of wheat to 'Y' at a price to be fixed by Z.but 'Z'valid to fix the price.is it valid contract now?explain.
Answers
Answer:
Explanation:
The answer of the question depends upon what authority 'Z' holds. To be a qualified personnel to decide price of a product manufactured by some other party is very essential.
Since 'X' is producing the wheat, he is well acquainted with the knowledge of how much investment he has done in terms of labor, infrastructure or raw materials, he holds complete right over his products and it should be he who shall decide the price of the product.
But suppose 'X' does not has any reach to customers or markets, he may use service of a third party for marketing of product. In this case, 'Z' can play a role and earn a share in the profit made by 'X'. If 'Z' is a government authority, he may use his right to decide the price of commodity keeping in mind the income that 'X' must generate for his product.
Answer:
This contact can only be valid if Z is a person who has the authority to fix the price.
There were two scenarios when this came.
First, z can be a government authority, so he can decide the price, considering the market and the profit the producer has to make to stay afloat.
Second, if Z is a marketer, is the medium between the buyer and the seller.