A contracted price is the price a buyer and seller have agreed for defined goods or services under specified conditions and dates. It can differ from the current list, spot or promotional price and may depend on quantity, location, indexation or customer eligibility.
What defines the contracted price?
- Item, service, specification and unit of measure
- Customer and supplying legal entities
- Currency, tax and delivery basis
- Quantity bands or minimum commitments
- Effective and expiry dates
- Adjustment, rebate and renewal rules
How should an adjustment be calculated?
If an illustrative contracted unit price of $80 permits a 4% annual adjustment, the new price is $80 × (1 + 4%) = $83.20. The contract must state the effective date, rounding, eligible base and whether the change is automatic or requires notice.
Contracted price vs. list price
List price is a published or standard starting price. Contracted price is the binding amount agreed for the applicable transaction conditions. The difference is not necessarily a discretionary discount because the contract may include commitments or service scope.
What should an invoice check?
Match the invoiced item, unit, quantity, currency, period and delivery basis to the active contract record. Resolve overlapping agreements or expired schedules before treating a price difference as an invoice error.
