PRICE

Sale and Price

The price in the sale is the sum of money owed by the buyer to the seller (article 1583 of the Civil Code)

The pricing mechanism in a liberal economy is the market

The principle provided for by article L 410-2 is that of freedom of prices.

PRIZE FORMATION :

Price determination and competition

The rules relating to the determination of prices are set by the provisions of Article L. 410-2 of the Commercial Code, taken up by Article L 113-1 of the Consumer Code.

Except in cases where the law provides otherwise, the prices of goods, products and services covered before January 1, 1987 by ordinance n ° 45-1483 of June 30, 1945 are freely determined by the play of competition.

However, in sectors or areas where price competition is limited either due to monopoly situations or lasting supply difficulties, or to legislative or regulatory provisions, a Council of State decree may regulate prices after consultation of the Competition Authority.

The provisions of the first two paragraphs do not prevent the Government from deciding, by decree in the Council of State, against excessive increases or decreases in prices, temporary measures motivated by a crisis situation, exceptional circumstances, a public calamity or a manifestly abnormal market situation in a given sector. The decree is made after consultation with the National Consumer Council. It specifies its period of validity, which cannot exceed six months. ”

Prices and competition law

Competition law prohibits fixed price practices. Concerted price fixing is a practice prohibited by article L 420-1 of the Commercial Code.

Providing price information is a prohibited cartel

On the other hand, the concerted fixing of prices by independent traders grouped together under the same brand does not constitute a prohibited practice when these traders are not located in the same catchment area; It is also possible for a franchisor to communicate to franchisees, located in the same catchment area, the maximum resale or recommended price scales, provided that these indications are unambiguous and that these prices do not apply in any way. reality the nature of imposed or minimum prices, Paris March 18, 1997, D. 1999 Somm 24

Price and contract law

Price determination

Price is an essential and determining element of the agreement of wills. Until 1995, the Cour de Cassation held that articles 1129 and 1591 required the price to be determined on pain of nullity. The aim of this case law was to protect the co-contractor, in particular in contracts for the exclusive supply of beer, from the unilateral possibility of fixing the price (see for example Com. 2 Nov. 1993) and to sanction “list prices”. The Court of Cassation had however made it a general rule and thus refused a reference to the market price (see Com. 11 Oct. 1978, D. 1979, 135 n. Houin), while the Court of Appeal of Paris admitted that the price was determinable on the ground that

Since the decisions of the Plenary Assembly of the Court of Cassation dated December 1, 1995, reversing the previous case law on the determination of the price, “Article 1129 not being applicable to the determination of the price, a court of appeal, which is not seized of a request for termination or compensation for abuse in the fixing of the price, legally justifies its decision by rejecting the exception of nullity of a contract for the rental of a telephone installation and amendments made, based on the indeterminacy of the price of part of the stipulated services “( Ass. Plén. December 1, 1995 )

The criterion now is abuse in pricing and controlling abusive practices. Civil contract law thus accompanies competition law by establishing the framework contracts regime.

Market price

Consumer information on prices

The Article L113-3 of the Consumer Code provides that

Any seller of a product or any service provider must, by means of marking, labeling, display or any other appropriate process, inform the consumer about the prices, the possible limitations of contractual liability and the particular conditions of the sale, in accordance with the terms set by decree of the Minister responsible for the economy, after consultation with the National Consumer Council.

This provision applies to all the activities referred to in the last paragraph of Article  L. 113-2.

The price display is mandatory so that the consumer can know the price and compare it without difficulty.

The quote is useful when the product or service is more complex and personalized.

The rules relating to the obligation to provide information by credit institutions, payment institutions and organizations mentioned in Article L. 518-1 of the Monetary and Financial Code are set out in Article L. 31-1-1 and sections 3 and 4 of chapter IV of title I of book III of the same code.

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Prices in public contracts and agreements

The owners, [….], were deceived as to the intensity of the competition. They did not detect that the rules of competition had been violated during the successive calls for tenders which were launched since the revelation was made in a fortuitous way following the dismissal of Mr X .. who exercised the functions of IT engineer at Bouygues. Thus public contracts, which constitute the area where it is imperative that competition rules be applied so that contracts are awarded at the best price to reduce the costs of works for which public enterprises or communities are responsible, the companies have come to an agreement. to obtain the award of contracts and arrogate undue profits to the detriment of those who finance the works with public funds. Companies cannot argue in their defense that in many cases the winning bid was for an amount lower than the administration’s estimate. Only the normal functioning of competition and the uncertainty of the amount of the offers proposed by the competitors are such as to guarantee that the fair price is obtained. Cons.conc. Decision n ° 06-D-07 bis * of March 21, 2006 relating to practices implemented in the public works sector in the Ile-de-France region

The fixing of prices within the framework of the holding of intellectual property rights is not a prohibited practice insofar as the products placed on the market can only be offered by a single operator Cons.conc. n ° 99-D-34, June 8, 1999 postcard market

Considering that the fact for producers who have adopted a policy of systematic market sharing of finding themselves confronted with the appearance of a new entrant to react by charging prices lower than their average variable production costs may be regarded as an anti-competitive agreement if it is established that this strategy had the object or could have the effect of prohibiting or limiting market access to the new entrant Decision n ° 97-D-39 of 17 June 1997 relating to practices implemented by various companies in the ready-mixed concrete sector in the ProvenceAlpesCôted’Azur region

the comparison of such variable standard average production costs of concrete by type of concrete with the invoiced sales prices therefore makes it possible, in the absence of more precise information, to assess the price policy followed by the company;

Considering, moreover, that the comparison of the variable average cost of concrete and the selling price of ready-mixed concrete may, in the event that the company does not have the means enabling it to calculate unit costs for each delivery , be carried out by taking on the one hand the average variable monthly cost, all concretes combined, and on the other hand the average selling price for all concretes combined; that such a method applied over several months, in addition to the fact that it makes it possible to reconcile perfectly homogeneous concepts, has the advantage of obtaining average structural deviations representative of the company’s strategy for all of its production

marketing at a price significantly lower than those charged by the competitor, this price difference not preventing them from being acquired by the same customers, does not constitute a fault,

Cass. com. June 17, 2003