The Unilateral Determination of Price – A Question of Certainty or Public Policy?

The unilateral determination of price has been a controversial issue for an extended period of time. During the 1990s the Supreme Court of Appeal asked if the rule should still form part of South African law. Specifically, the court raised a few questions in respect of the rule and commented that the rule as applied in South African law is illogical. The court also remarked that public policy, bona fides and contractual equity might also be employed when considering such issues. Despite the criticisms of the Supreme Court of Appeal, it would seem that the rule still forms part of our law. This article investigates whether or not the rule should be retained in the South African common law. The answer will depend on two separate questions: Is the rule a manifestation of the requirement of certainty of price? If not, does public policy require that the rule be retained? The article shows that the rule prohibiting the unilateral determination of price should not be seen as a manifestation of the requirement of certainty of price. This is because there are various circumstances where the unilateral determination of the price results in certainty of price or can be applied in such a way as to arrive at certainty of price. Most of these arguments require that the discretion to determine the price should not be unfettered and should be subject to some objective standard. This can be done expressly or tacitly in the contract, or an objective standard (in the form of reasonableness) will be implied by law. Thereafter, the article considers various public policy considerations that could be used to determine if a discretion to determine the price should be enforced. The article argues that public policy may dictate that such a discretion should be valid and enforceable provided that it is not unfettered and subject to an external objective standard or reasonableness. However, in cases where an unfair bargaining position is present, public policy may dictate otherwise. The article accepts that whether a term providing for the unilateral determination of the price would be contrary to public policy or not will depend on the facts of the case. However, it is submitted that, at a minimum, the considerations and factors discussed in the article should be taken into account when making such an assessment.

question was referred to the Supreme Court of Appeal in NBS Boland Bank Ltd v One Berg River Drive CC; Deeb v ABSA Bank Ltd; Friedman v Standard Bank of SA Ltd. 6 The question before the court was whether or not a clause providing a party with the discretion to fix the performance of the other party is valid and enforceable in our law. The court set three requirements for a discretionary power to fix performance to be valid and enforceable: firstly, the discretion is not to fix a purchase price or rental payable; 7 secondly, the discretion is to fix the performance of the other party; 8 and, thirdly, the discretion must be exercised arbitrio boni viri. 9 Although the matter before the court was in respect of a discretion granted to a lender to adjust the interest rate, the court did refer to the rule that a sale agreement is invalid if one of the parties is given the power to determine the purchase price payable. 10 The court raised a few questions in respect of the rule and commented that the rule as applied in South African law is "illogical". 11 The court also remarked that public policy, bona fides and contractual equity might also be employed when considering such issues. 12 However, the court made it clear that all of these comments were made obiter. 13 Despite the criticisms of the Supreme Court of Appeal, it would seem that the rule still forms part of our law. 14 This article investigates whether or not the rule should be retained in the South African common law. The answer to this question will depend on two separate questions: Is the rule a manifestation of the requirement of certainty of price? If not, does public policy require that the rule be retained?   2 The rule as a manifestation of the requirement of certainty of price

Introduction
In general terms, a contract can be defined as "an agreement made with the intention of creating an obligation or obligations". 15 In other words, the parties must have the intention to be bound by the terms of the agreement. The enforcement of such agreements will be possible only if the obligations that the parties are binding themselves to are certain or can be ascertained. 16 As such, it is an accepted legal principle that the terms of a contract must result in certainty regarding their legal consequences. 17 This usually implies that the parties must clearly state the material aspects of the obligations and how they should operate. 18 No contract can exist if the agreement is so vague that its material aspects and obligations cannot be determined. 19 The price is an essential element of a contract of sale. 20 Certainty of price is therefore a requirement for a contract of sale in South African law. 21 In 1964 the requirement of certainty of price was formulated in Burroughs: 22 It is, I think, clear that there can be no valid contract of sale unless the parties have agreed, expressly or by implication, upon a purchase price. the amount of that price in their contract or agree upon some external standard by the application whereof it will be possible to determine the price without further reference to them. … Moreover, in our law, which does not conform in this regard with certain other systems, there can be no valid contract of sale if the parties have agreed that the price is to be fixed by one of them or by his nominee.
The above formulation was approved in a number of cases -including cases before the Supreme Court of Appeal. 23 It is clear that a price must be determined in the contract itself or be capable of determination in accordance with some external standard. 24 An external standard would refer to an objective one. 25 Furthermore, it must also be determined without further reference to the parties. 26 It appears that this would mean that the parties may not agree that one of them has the power to determine the price. 27 In a case such as this it would appear that a discretionary power granted to one of the parties to determine the price would render the sale void in South African law. 28 As shown above, the rule is traditionally viewed as a manifestation of the requirement of certainty of price. However, this view is not without criticism. The arguments for and against the rule dealing with the requirement of certainty of price are investigated below.

Arguments that the unilateral determination of price does not comply with the requirement of certainty of price
There are four main arguments in support of the assertion that a unilateral determination of price does not comply with the requirement of certainty of price and that this uncertainty cannot be remedied. They are: (a) the unilateral determination of price excludes agreement on one of the essential elements of a contract of sale; (b) the unilateral determination of price amounts to a pure potestative condition; (c) the unilateral determination of price is too vague to be enforceable; and (d) the court should not make a contract for the parties.
Each of these arguments is investigated below.
2.2.1 A discretion to determine the price excludes agreement on one of the essential elements of a contract of sale A tendency exists in South African law to distinguish between discretions granted in respect of essential elements of a contract and discretions granted in respect of nonessential elements of a contract. 29 In respect of contracts of sale, Machanick v Simon 30 can be mentioned. The court stated that the price left to the discretion of the buyer in Roman law was imperfect. 31 The court stated that as the price is one of the essential elements of a sale, "there is no room for doubt in that case". 32 The court held that this can be distinguished from non-essential discretions which must be exercised arbitrio boni This distinction is based on the argument that a discretion to determine the price renders the contract void because consensus on an essential element of the sale (ie the price) is lacking. 35 This view is open to criticism. Laing argues that the reason for the requirement of certainty of price is to "place the price beyond the reach of consensus" and to ensure that no further agreement is necessary to determine the final price. 36 Where one of the parties is given the power to determine the price, no further agreement is necessary and there is consensus on the essential element of price. 37 The party must merely exercise the discretion and determine the price. This is supported by the criticism in Benlou case, 38 where the court remarked that it could not understand why the purchase price determined by a third party is more certain than the purchase price determined by one of the parties to the contract.
Subsequently, the court in NBS Boland Bank 39 agreed with the criticism and expressed doubt as to the reasons for the distinction between a discretion to determine the price and other contractual discretions.
This distinction between discretions dealing with essential and non-essential terms was also applicable to the rent in a lease agreement. However, in Genac Properties 40 the court was willing to enforce a discretion that entitled the landlord to determine expenses to be paid (as part of the rent), because the court was of the view that it referred to an objective standard (the expenses were limited to expenses actually and reasonably incurred). This reasoning was followed in Engen Petroleum Ltd v Kommandonek ( potestative condition may be described as a condition "which depends entirely upon the will of the promisor" (Roberts Wessels' Contract Vol 1 406 para 1313). It is also known as a condition si voluero ("if I wish") and "refers to the situation where the existence of the contract is made dependent on the will of one of the parties" (Du Plessis 2012 Fundamina 21). 45 Dawidowitz 672. 46 Laing Price Adaptation 131 n 612. Therefore, the court's remarks regarding unilateral determinations of price were made obiter (Lubbe 1989  Clearly, Wessels held that a discretion to determine the price ("I will buy your horse for what I think it is worth") amounted to a pure potestative condition ("it depends wholly on his own will what part of it he should perform"). 49 This argument is open to criticism and must not be followed because a discretion to determine the price cannot be equated with a discretion to determine whether or not to be bound to the agreement. 50 Reference must also be made to Theron v Joynt, 51 where the court stated as follows: refers to a discretionary power, the authorities listed by Deputy Chief Justice Van Heerden do not support his argument because all of these texts refer to a pure potestative condition. This was approved by the court in the Erasmus case, 55 where the court held that a discretion to amend the terms of a contract does not amount to a pure potestative condition.
A further argument is that such a discretion amounts to a pure potestative condition because it is uncertain whether the party will ever determine the price. 56 Laing 57 counters this argument as follows: first, such uncertainty has not prevented the recognition of third-party price determinations. Secondly, the failure to determine the price could possibly be construed as a breach of contract and be dealt with accordingly.

A discretion to determine the price is too vague to be enforceable
In NBS Boland Bank 58 the court stated the following: A recurring theme in those cases in which it was held that the clause in question is invalid is that a contract which empowers one of the parties to fix a prestation is void for vagueness. With one exception that was undoubtedly the view of Roman-Dutch law writers in regard to the determination of the price in a sale and the rental in a lease.
In his commentary on the above extract, Kerr 59 remarks that there is no reference in As shown above, a discretion to determine the price is not the same as a contract where the party can decide whether he wants to be bound to the contract or not. 62 Such a contract is also not void for vagueness. Vagueness refers to "indefinite terms", terms "not definitely or precisely expressed" or "deficient in details or particulars". 63 In respect of words and language, it means "[n]ot precise or exact in meaning". 64 Therefore, vagueness refers to a contract where the intention of the parties cannot be determined because the terms are indefinite, imprecise, insufficient or unclear in their meaning and, consequently, the contract is void for vagueness. 65 Where one of the parties is in clear language given the power to determine the price, the agreement cannot be described as vague. 66 The only thing that is not certain is the eventual price. 67 However, the moment the price is determined, this uncertainty disappears. 68 Another example of such a contract is a contract of sale where the price is to be determined by a third party. A further argument that the contract is void for vagueness is that it is uncertain how the eventual price should be determined. If the party with the discretion fails to determine the price, what guidelines must the court follow to make such a determination? It is argued below that in the absence of guidelines in the contract itself the court should imply that such a discretion should be exercised arbitrio boni viri. 70 It will also be shown that there are principles and guidelines that could be followed to make such a determination. 71

2.2.4
The principle that the courts should not make a contract for the parties Kerr argues that the unilateral determination of price according to the standard arbitrio boni viri should not be allowed. One of the reasons for his view is that such an interpretation would result in the same problems encountered in third-party price determinations. 72 Where there is a dispute, the court acting in the place of a reasonable person will have to determine the price or set the contract aside. 73 Kerr 74 argues that this will breach the principle that the courts should not make a contract for the parties. In support of his argument, Kerr 75 refers to the H Merks case.
However, in this case the parties agreed that the "price may be increased by mutual intention is usually clear. Furthermore, this principle could be tempered by the application of the maxim ut res magis valeat quam pereat. 78 Where this is not possible (as in the case of a clearly unfettered discretion), the courts will not be willing to imply an ex lege term of reasonableness and determine the price for the parties. 79

Arguments that the unilateral determination of price does comply with the requirement of certainty of price or does not need to
There are also arguments that the unilateral determination of price does comply with the requirement of certainty of price or does not need to. The following main arguments are investigated: (a) the use of the word "imperfectum" in D 18 1 35 1; (b) where the discretion refers to an objective or external standard; (c) the standard of arbitrio boni viri should apply to such discretions; (d) the discretion can be granted to either the seller or the buyer; (e) the contract should be interpreted in favour of its validity, and (f) the contract could be enforced as an innominate contract. In NBS Boland Bank 82 the court stated that "in some cases providing for discretional determinations there may be no enforceable contract until the determination is made. But when made an unconditional contract comes into being." The court was not specifically discussing a discretion to determine the price, but this would be a plausible interpretation that would allow for a valid contract as soon as the price was determined.

Where the discretion refers to an objective or external standard
In Burroughs Machines the court stated that the parties "must fix the amount of that price in their contract or agree upon some external standard by the application whereof it will be possible to determine the price without further reference to them". 83 From the above formulation, it is clear that when the price is not fixed in the contract itself, it must be capable of determination in accordance with some external standard (which will be an objective standard "stretching the limits of the meaning of the term 'objectively ascertainable'", 89 but it is clear that our courts have been prepared to follow such an interpretation.
In Murray & Roberts 90 the court was prepared to accept that an agreement between the parties that the price would have to be determined by one of the parties together with a third party would be valid because it would "on the face of things" refer to an objective and external standard. This was also the case in Stead v Conradie. 91 In this case, a clause in a contract provided that one of the parties could determine the "current value" of the property, which would form the basis of the price to be paid. 92 The court held that "current value" referred to the market value, which could be objectively ascertained. 93 The court said that the discretion was not left to the absolute discretion of the party and therefore it was valid as it referred to an external standard, which could be determined without further reference to the parties. 94 The courts have also been prepared to follow such an interpretation in respect of contracts of lease. In Proud Investments (Pty) Ltd v Lanchem International (Pty) Ltd 95 the court had to decide whether a provision in a rental agreement providing for the tenant to be liable for certain costs incurred by the landlord was valid. The court a quo held that in effect the clause meant that the landlord could determine such costs in his discretion and therefore the clause was invalid. 96 However, this decision was reversed on appeal. The court referred to the provisions in the contract that required that the costs had to be reasonable and any dispute concerning the 89 Hawthorne 1992 THRHR 647. 90 Murray & Roberts 515. However, the court accepted that whether this method would refer to an objective and external standard or not would depend on the relationship between the contracting parties and the independence and competence of the third party who jointly with one of the parties would determine the price. However, Hawthorne 1992 THRHR 642 argues that the judgment has indicative (but not authoritative) value because the court dealt with the specific facts only and refused to lay down a general rule. reasonableness of the costs should be referred to the landlord's auditors. 97 The auditors would act as experts and their decision would be final and binding on the parties. 98 The auditors would have to consider the fair market costs of the services supplied and call for evidence from suitably qualified persons in making their decision. 99 The Supreme Court of Appeal held that the discretion was valid as it did provide for an "objective determination of reasonableness … by the landlord's auditors as expert outsiders without any reference to the landlord". 100 In the case of Genac Properties 101 the court stated that the discretion to determine expenses to be paid (as part of the rent) was objectively ascertainable because the expenses were limited to expenses actually and reasonably incurred. Therefore, the court held that the expenses were "not subject to the landlord's will or whim". 102 In Benlou Properties 103 the court stated that a discretion would be invalid if the rent could be determined in one of the party's unfettered discretion. As the discretion granted to the lessor to determine additional rent was subject to three qualifications, all of which referred to an objective standard, the court held that the clause was valid. 104 In Engen Petroleum 105 the lessee was granted the right to adjust the rental payable in terms of the lease agreement. However, such a right was subject to three requirements: firstly, the discretion might be exercised only on reasonable grounds; secondly, such a right would arise only if certain circumstances changed to make the continued performance of the lessee uneconomic; finally, the adjustment had to render the lessee's obligations economical as opposed to uneconomical. The court held that all these requirements referred to an objective standard which could be determined and, as such, the clause was valid. 106 Therefore a discretion will be valid if it is subject to an external or objective standard and this could include a reference to reasonableness. 107 2.3.3 The standard of arbitrio boni viri should apply to such discretions The courts are also willing to read reasonableness into a discretion unless it is clear from the contract that the discretion is not subject to these standards. 108 Therefore, once reasonableness is implied, the discretion refers to an objective standard and complies with the requirement of certainty of price. 109 The court in NBS Boland Bank 110 stated that "unless a contractual discretionary power was clearly intended to be completely unfettered, an exercise of such a discretion must be made arbitrio boni viri". These two texts deal with the sale of slaves and a condition imposed by the seller, namely, that the sale of the slave is conditional on his satisfaction of the accounts managed by the slave on his behalf. 114 To ensure that the seller did not stall the sale for frivolous or captious reasons, the seller was required to make his judgment arbitrio boni viri. 115 The Supreme Court of Appeal was prepared to deduce, from this passage, a general implied term of reasonableness applicable to all contractual discretions (save contracts of sale and lease). As the passage originally deals with a contract of sale, there does not seem to be any reason why the rule should not be extended to apply to the unilateral determination of price. 116 The court itself also expressed doubt as to the reasons for the distinction between a discretion to determine the price and other contractual discretions. 117 The court did not decide whether these principles should apply to a contract of sale or lease, but there seems to be authority in our case law for applying this principle to both types of contract.
Laing traced such authority back to 1909 in the case of Dickinson & Fisher v Arndt & Cohn. 118 In this case the parties agreed that the price was subject to market fluctuations. 119 The court held that this would mean "that the price may be increased at the option of the sellers … upon fluctuation upwards in the market price". 120 Therefore, before the price could be adjusted there had to be an increase in market prices. 121 Furthermore, the court held that the adjustment of the seller might not result in a price "for too much". 122 Although this does not explicitly refer to a reasonable discretion, it clearly refers to a limited discretion. less 15 per cent., provided always that in the event of the purchaser considering the cost price of any portion of the stock-in-trade as too high, he shall be entitled to decline to purchase same". 123 As it happened, the buyer rejected the majority of the stock because he considered the marked prices as excessively high. 124 The seller argued that the buyer's argument that he was entitled to reject the stock would amount to a claim to determine his own price, which was not allowed. 125 The court held that the parties considered that the buyer was not likely to reject the stock mala fide as he would need it in the new business, which indicated that the parties intended that he would act bona fide. 126 Finally, the court held that in line with the principle of freedom of contract, the parties could leave a condition of the contract to the discretion of one of them and that in the present case such a discretion had to be exercised bona fide. 127 In respect of contracts of lease, this type of reasoning reflects in the more recent cases of Benlou Properties and Engen Petroleum, which deal with a discretion to adjust the rental in a lease agreement. 128 If these principles should apply to a discretion to determine the price in a contract of sale, it is necessary to determine the meaning of the phrase arbitrio boni viri. On various occasions the courts have discussed the standard against which a discretionary power must be tested. proposed that the discretion should be exercised in good faith and reasonably. He argued that good faith would refer to the purpose for the exercise of the discretion and reasonability would refer "to the various socio-economic factors that influence the sustainability of a particular performance". McLennan 2000 SA Merc LJ 487 also referred to the differences between good faith and reasonableness and argued that "the test should expressly include objectivity: the reasonably and … exercise a reasonable discretion". This would refer to an objective standard. 132 In the Erasmus case 133 the court referred to the dictionary meaning of arbitrio boni viri, namely, "the decision of a good man", which is explained as "a reasonable decision". The court has also held that in the current-day context this would mean "the judgment of a fair-minded person". 134 In Erasmus 135 the court held that "the concept of reasonableness is so settled in our law that it can readily be used, and is used, as an objective standard that is justiciable by a court". The fact of the matter is that the courts are comfortable and familiar with working with terms such as "fairness" and "reasonableness" and already there are various guidelines laid down that could be used in such an assessment. 136 Generally, the courts have referred to the dictionary meaning of "reasonable", namely that which is equitable or fair, and not asking too much. 137 In respect of contractual discretions, the courts have considered the following factors to determine whether or not the discretion was exercised reasonably: (a) the intention of the parties when the contract was concluded; 138 (b) the facts of the particular case (ie the terms and circumstances of the contract); 139 determination must be exercised fairly and reasonably". Otto also refers to the test of reasonableness (Otto 2000 SALJ 5 price is referred to as a price that is "manifestly unjust", "manifestly unfair" or "altogether too high or too low". 159 This manifestly unjust price is not void ipso facto but must be set aside by the court. 160 The court can then replace the price determined by the third party with the price the court considers reasonable. 161 The party attacking the third-party determination will have to put evidence before the court of what a reasonable determination would be, which will enable the court to determine a reasonable price. 162 Once the court has determined the price, the non- determination? 168 In the latter instance, it could be argued that the parties should be bound to the price determined by the court. It is submitted that the parties' intention should also be the determining factor when deciding if the parties must be bound to the court's determination in cases dealing with unilateral determinations of price. 2.3.4 The discretion can be granted to either the seller or the buyer A further consequence of the principles discussed above and the criticisms levied at viewing price discretions as pure potestative conditions is that the discretion should be valid whether it is granted to the seller or the buyer (as long as it results in certainty of the price).
In NBS Boland Bank 169 the court referred to the Roman-law texts dealing with pure potestative conditions. The court stated that all of these texts deal with a situation where the promissor has a right to determine his performance but do not deal with the situation where the promissee has the right to determine the promissor's obligation. 170 Therefore the court held that where a party can determine the other party's performance such a contract is valid (provided the discretion must be exercised arbitrio boni viri), but did not answer the question of whether a party could determine his own performance. 171 Subsequently the court in Erasmus 172 held that a discretion granted to a party to determine his own performance would be allowed if the discretion was "subject to an objective standard and thus fettered". The court held that there is no reason to limit the rule that discretionary powers must be exercised arbitrio boni viri to discretions granted to the promissee. Therefore, if these principles are extended to apply to sales it would mean that a discretion granted to either the buyer or the seller would be valid, provided the discretion is not an unfettered one.

A contract should be interpreted in favour of its validity
It is an established principle that the courts should favour an interpretation that renders the contract valid rather than an interpretation that renders it void. 174 This rule of interpretation refers to the maxim verba ita sunt intelligenda ut res magis valeat quam pereat. 175 This is in accordance with the principle that the court should "rather try to help the parties towards what they both intended rather than obstruct them by legal subtleties and assist one of the parties to escape the consequences of all that he has done and all than he has intended". 176 The court should not act as the destroyer of bargains but rather give operation to agreements made with a serious intention to be binding. 177 This is in accordance with the public policy that agreements entered into freely should be enforced. 178 This is probably one of the reasons why the courts are willing to imply that a discretion must be exercised reasonably rather that unfettered. 179 Kerr 180 concedes that this principle forms part of the rules of interpretation, but he argues that this principle should not be used to "validate an agreement which lacks consensus on an essential requirement". However, as shown above, such contracts determine the price at which certain stands would be sold to the public. However, the court held that the price was a material term of the contract and would have to be ascertained with reference to an external standard. The court stated explicitly that it was not laying down a general rule. 185 However, the judgment is indicative that even if the court had been willing to view a contract granting one of the parties a discretion to determine the price as an innominate contract, such a discretion would also need to refer to an external standard where the price was a material term of the contract. As the standard for a certain price in a contract of sale would be identical to the standard required of a price in an innominate contract, regarding the contract as an innominate contract would take the issue no further.

Conclusion
It should be clear from the above discussion that the rule that prohibits the such a way as to arrive at certainty of price. Most of these arguments require that the discretion to determine the price should not be unfettered and be subject to some objective standard. These requirements may be incorporated into the contract (either expressly or tacitly) or an objective standard (in the form of reasonableness) will be implied by law. 187

3
The rule and public policy

Introduction
As the requirement of certainty of price should not be used as the test against which a unilateral determination of price is tested, the validity of such discretions should rather be assessed against public policy. 188

The concept of public policy
It is a fundamental principle of the law of contract that agreements made with a serious intention to be legally binding should be enforced. 189 However, when a contract is against public policy it will not be enforced. 190 The concept of public policy is difficult to define but it is generally accepted that a contract will be contrary to public policy if it runs counter to the interests of the If a term is contrary to public policy, it will be unenforceable or void. 204 The price is one of the essential elements of a contract of sale and without a price there can be no sale. Where a discretion to determine the price is contrary to public policy, there is no price and the contract will be void. Sasfin 9. See also Hutchison and Pretorius Kontraktereg 185. The same principle applies in respect of the enforcement of a contractual term. In Bredenkamp the court stated that it does not believe "that the enforcement of a valid contractual term must be fair and reasonable, even if no public policy consideration found in the Constitution or elsewhere is implicated" (para 50) and "that fairness is not a freestanding requirement for the exercise of a contractual right" (para 53 '… if there is one thing which more than another public policy requires it is that men of full age and competent understanding shall have the utmost liberty of contracting, and that their contracts when entered into freely and voluntarily shall be held sacred and shall be enforced by Courts of justice'.

Policy considerations relevant
In the case of Erasmus 207 the court cited contractual autonomy as one of the reasons why a discretion to determine a party's own performance should be allowed.
When a party agrees to the unilateral determination of price by the other party, he is agreeing (and thus exercising his contractual autonomy) "to forfeit his autonomy regarding the determination of the consequences of the contract". 208 Therefore, giving effect to the discretionary clause would be in accordance with the principle of contractual autonomy. 209 Therefore it can be argued that public policy dictates that discretionary powers to determine the price should be valid.
The fact that a person should be allowed to determine his own matters, even to his detriment, has been held to refer to the constitutional values of dignity and

The principle of simple justice between man and man
In both of the cases referred to above, the court added a proviso that the discretion may not be unfettered. 213 The court in Benlou 214 referred to the rules governing the certainty of price for this proviso. However, in Erasmus 215 the court referred to the fact that "all contracts are subject to the principle of good faith" and therefore extended discretionary powers to include the determination by a party of its own performance provided it did so arbitrio boni viri. Good faith is a factor that is taken into account when deciding whether a term is against public policy or not. 216 Although the role of good faith in the concept of public policy is not very clear, 217 good faith has been thought to inform the principle of simple justice between man and man. 218 This principle requires that the parties' individual interests must be weighed against each other. 219 The unreasonableness of a term against one of the parties must be weighed up against the interests of the other party, who is protected by the term. 220 However, the courts will not hold a term as contrary to public policy merely because it is unreasonable or unfair to one of the parties to the contract. 221 The term would have to go so far as to be contrary to the interests of the public. 222 Where the term goes further than what would reasonably be necessary to protect the interest of the party in whose favour it is, this could indicate that the term is contrary to public policy. 223 Hutchison and Pretorius Kontraktereg 193. This seems to accord with Lubbe's view that good faith, in the context of public policy, should not only encompass honesty but also require that a party's pursuit of his own interest "must be tempered by a reasonable measure of concern" for the other party's interest (Lubbe 1990 Stell LR 20 as quoted by Naudé 2009 SALJ 518 term is to place one of the parties almost entirely in the economic power of the other party. 224 As is shown below, there are practical considerations that would necessitate a discretion to determine the price. 225 However, none of these would require the seller to reserve an unfettered discretion to determine the price. It is therefore not surprising that there is no authority in our case law that allows for an unfettered discretion. 226  not clear and therefore it is difficult to determine whether the discretion would be regarded as valid or not. They submit that this will have to be determined with reference to the specific facts of the case with special consideration given to the possibility of abuse of power by the party exercising the discretion. 228 Laing Price Adaptation 154 argues that the willingness of the court to imply a term of reasonableness in contractual discretions is a manifestation of the principle of good faith. As good faith informs public policy, the willingness of the court to imply a term of reasonableness can also be found in policy considerations. In ABSA Bank Ltd v Lombard 234 the court dealt with the discretion of a bank to adjust the interest rate in respect of a loan. The debtor placed evidence before the court that the bank increased the interest rate upon an increase in the prime lending rate, but failed to reduce the interest rate when the prime lending rate decreased. 235 The court held that this evidence was enough to establish a prima facie case that the bank had exercised its discretion unreasonably. 236 It is, of course, easier to prove this in the case of interest rates as all of them are linked to some interest rate or other (for example, the prime lending rate or the Reserve Bank rate) that can be determined with ease. However, using the guidelines and factors outlined above to determine reasonableness, it could be possible to establish a prima facie case for unreasonableness in respect of a discretion to determine or adjust a price.
Specifically, the factors adjusted from those proposed by Otto in respect of interest rate discretions could provide good examples of the kind of evidence that could be put before the court to establish a prima facie case that the seller exercised his discretion unreasonably. 237 3.3.3 The parties should (as far as possible) have equal bargaining power As shown above, there is authority in our case law that supports a limited discretion, either because the discretion must be exercised reasonably or because the discretion refers to an objective or external standard. 238 These standards would appear to overcome the possible problem that one of the parties might abuse such power. If the discretion refers to a reasonable discretion, the courts regard such a discretion as referring to an objective standard. See paras 0 and 0 above.
Kerr 239 argues that there is a further danger in allowing a limited discretion. His concern is in respect of limited discretions where an unequal bargaining position exists. 240 This refers to the policy consideration that parties, as far as possible, should have equal bargaining power, which can be deduced from the underlying constitutional value of equality. 241 Where an unequal bargaining position is present, the weight given to the principle of contractual autonomy (and the values of freedom and dignity) must be decreased. 242 It has been said, and it is true, that market competition should temper this problem to some extent. 243 However, Kerr 244 argues that if such a discretion is allowed, dominant parties would include such discretions in their standard-form contracts.
The other party would then either have to accept the determined price or attack the discretion. 245 Attacking the discretion would be a time-consuming and expensive endeavour and, more often than not, the costs of attacking the discretion would exceed the determined price. 246 Kerr's 247 fear is that this would result in the dominant party's setting a price above the appropriate value "secure in the knowledge that few, if any, opposing contracting parties would be in a financial position to challenge the determination". There would seem to be some merit in this argument. However, an unequal bargaining position per se will not be enough to indicate that a term is contrary to public policy. This factor must be considered There are a few exceptions to this rule (see s 23 (7)-(10 of the CPA). 252 Section 23(6)(b) of the CPA. 253 Section 48(2)(a) of the CPA provides that a term is unfair, unreasonable or unjust if it is excessively one-sided in favour of any person other than a consumer. S 48(2)(b) states that if a term of an agreement is so adverse to the consumer as to be inequitable, the term will be unfair, unreasonable or unjust.  (1) provides that these terms would be applicable to consumer contracts between a supplier operating on a for-profit basis and acting wholly or mainly for purposes related to his or her business or profession and an individual consumer or individual consumers who entered into it for purposes wholly or mainly unrelated to his or her subject to section 48(1)(a)(i), which provides that a supplier may not offer to sell or enter into an agreement to sell any goods at a price that is unfair, unreasonable or unjust. 255 3.3.4 Practical considerations in favour of the unilateral determination of price Although practical considerations are not a policy consideration per se, they are relevant to establishing the purpose of the term in order to determine whether or not the term protects the interests of the favoured party more than reasonably necessary. There are a number of practical considerations that would favour (or even necessitate) the use of discretionary powers in respect of the price. 256 As will be seen below, none of these would make it necessary for the seller to reserve an unlimited discretion to determine or adjust the price.  (3)(h) provides that a term is presumed unfair if it allows the supplier to increase the price agreed on when the agreement was concluded without the consumer having the right to terminate the agreement (subject to the exceptions listed in reg 44(4)(b)). Secondly, reg 44(3)(i) provides that a term is presumed unfair if it allows the supplier to alter the terms of the contract unilaterally. The same exceptions as in the first instance apply and a further exception is where the supplier has the right to amend the terms of an open-ended agreement unilaterally, provided the supplier informs the consumer of the amendment and the consumer has the right to dissolve the agreement immediately (reg 44(4)(c)(iv)).

255
A detailed discussion of these provisions is outside the scope of this article. in labour costs, as was the case in Westinghouse. 271 As stated above, the majority of Westinghouse's clients were prepared to accept the increase in price (presumably because they found it reasonable). However, if our law were not to allow any discretionary powers in respect of price, it would leave all Westinghouse's contracts open to attack and possibly void. 272 As pointed out by Laing, 273 that would be "quite bizarre".

Final remarks on the rule and public policy
It appears that in most cases public policy would dictate that a discretion to determine the price should be enforced, provided that such a discretion is not unfettered and subject to an external objective standard or reasonableness.
However, in cases where an unfair bargaining position is present, public policy may dictate otherwise. As stated above, public policy is context-sensitive and dependent on the facts of a particular case. 274 Whether a term providing for the unilateral determination of the price would be contrary to public policy or not will depend on the facts of the case. 275 In fact, the court may identify other factors that may be relevant to a public policy investigation in a specific case. However, it is submitted that at a minimum the considerations and factors discussed above should be taken into account when making such an assessment.

Conclusion
It has been shown that the rule that prohibits the unilateral determination of price should not be regarded as a manifestation of the requirement for certainty of price.
Where a discretion to determine the price is subject to an external objective standard or reasonableness, this will result in the price being certain and consequently the contract of sale should be valid. This also seems to accord with the principle of contractual autonomy. present, further investigation is required because the term could possibly be regarded as contrary to public policy. This reasoning is reflected in recent developments in consumer law that have marked a departure from the traditional reverence reserved for contractual autonomy to a contractual order striving to protect consumers against unfair business practices (including unfair contract terms and prices).