Short answer. No, not as a binding stipulation. Article 1473 states the fixing of the price can never be left to the discretion of one contracting party. However, if the price that party fixes is actually accepted by the other, the sale is perfected on that price, since acceptance cures the defect.
What the law says
The fixing of the price can never be left to the discretion of one of the contracting parties. However, if the price fixed by one of the parties is accepted by the other, the sale is perfected.
Civil Code, Article 1473 — Price Cannot Be Left to One Party. Read the full provision →
A clause giving one party sole pricing power is not valid on its own
Article 1473 states the general rule without exception: the fixing of the price can never be left to the discretion of one of the contracting parties. A price is one of the essential elements of a contract of sale, and the law will not let one side unilaterally control that element while the other is simply bound to accept whatever figure is named. A clause in your contract purporting to give one party that kind of open-ended discretion over the final price does not, by itself, create a valid, enforceable price term.
But actual acceptance of the fixed price changes the outcome
The same article immediately qualifies the rule: however, if the price fixed by one of the parties is accepted by the other, the sale is perfected. So the defect is not in one party naming a price; it is in a clause that would let that party impose a price the other side never actually agreed to. Once the party without discretion actually accepts the specific price named, the sale becomes perfected on that price, because at that point there is genuine mutual consent to a determinate figure, not a one-sided power to dictate it.
Why the law distinguishes discretion from acceptance
The concern behind Article 1473 is consent, not the mechanics of who happens to name a number first. A contract clause that leaves the price to one party's unchecked will effectively removes the other party's consent from the price term altogether, since that party would be bound to whatever figure is chosen no matter how unreasonable. Requiring actual acceptance restores genuine consent to the process: the price only becomes binding once the party who did not set it has agreed to that specific amount, rather than being contractually obligated in advance to accept anything at all.
What this means for your contract
If your contract simply states that one party will decide the price at will, that clause by itself does not create an enforceable obligation to pay whatever figure is later named, since Article 1473 does not allow discretion alone to fix the price. What can make a specific price binding is your actual acceptance of the particular figure once it is proposed. It is worth revisiting the pricing clause to make clear how and when the price will be proposed and confirmed, so both sides know exactly when a binding price has been reached.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Nicasio Macutay vs. Sosima Samoy, et al, G.R. No. 205559, December 2, 2020 — read the decision on LawPhil →
- Consolidated Rural Bank (Cagayan Valley), Inc., vs. The Honorable Court of Appeals, et al, G.R. No. 132161, January 17, 2005 — read the decision on LawPhil →