Fixed price

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The fixed price ( English fixed price ) is in the business into various fields of differently defined price , either officially by legal norms or in the private sector by contract nor may be exceeded is set and neither too easy. Sometimes incorrect ideas are associated with the term “fixed price”.

General

Fixed prices are characteristic of the centrally planned economy and under socialism ,; Retail prices were approved in the GDR , for example . They were then firmly in place and could therefore be printed, embossed or injection molded on the products during their manufacture.

In most market economies , on the other hand, almost all prices are subject to free price formation through supply and demand , so that they are exposed to more or less large fluctuations due to the price mechanism . Exceptions are price limits or price increases that have to be approved in the interests of the entire company or for market regulation.

In the context of government price controls , minimum prices , fixed prices or maximum prices are sometimes set. Heinrich von Stackelberg said in 1951: "Just as the fixed price above the normal price is to be addressed as a minimum price, the fixed price below the normal price level represents a maximum price".

Fixed prices in individual branches of industry

This article or paragraph presents the situation in Germany . Help us to describe the situation in other countries.

Fixed prices - with different effects - are available in retail , in the banking sector , in the construction industry or as legally established prices.

trade

retail trade

In contrast to the sales prices that are individually negotiated in the bazaar , the prices set by retailers are then referred to as fixed prices if a dealer only wants to sell at these prices and is not willing to negotiate . Fixed offer prices are of the utmost importance for private households . They are mainly found in retail, weekly markets and mail order . Such fixed prices are often used as a basis for negotiation and can therefore be reduced - outside of the food retail sector - as part of price negotiations between buyer and seller.

In the business offer prices are referred to as fixed price, the prices unless non-binding , but are intended to be valid for a period of time. This expresses that the offer with the intended price is binding for this period.

Branded items

In branded a fixed price is often a characteristic feature. To this end, led Konrad Mellerowicz made in 1955: "The fixed price is also a prerequisite for consistent quality ; the same quality is always tied to the same price, ie a fixed price ”. Fixed prices for branded items were lifted in Germany in December 1973.

Price maintenance

The advantages of fixed prices are reliability, stability and thus the ability to plan purchase prices as well as the elimination of price negotiations. In its draft of the GWB in January 1955, the Bundestag assumed that “there is a certain psychological connection between fixed price and product quality in the minds of consumers . Inconsistent sales prices easily evoke the idea in consumers that the quality of the goods also fluctuates. His confidence in the quality of the goods and thus the value of the goods would be affected ”. However, vertical price maintenance is only permitted for a few products (e.g. fixed book prices , newspapers or magazines in accordance with Section 30 GWB, tobacco products in accordance with Section 26 (1) TabStG and Section 28 (1) TabStG or prescription drugs ). Sometimes there is de facto price maintenance even with recommended retail prices ( recommended retail price ).

Credit institutions

Fixed rate

The fixed interest rate is an interest rate that remains constant for a certain period of time , regardless of the current development of market interest rates . Fixed interest rates exist both in the lending business ( loan interest ) and in the deposit business ( credit interest ): A legal definition is provided by Section 489 (5) BGB , according to which a “tied” interest rate is agreed as a fixed percentage for the entire contract period. A fixed interest rate can either be agreed for the entire term of a loan or an investment or only for part of the term (see fixed interest period ).

Custody business

According to section 64 (6) sentence 2 of the WpHG , the fixed price is legally defined in the securities account business . According to this, an investment services company may not execute a transaction based on its independent fee- based investment advice as a transaction with the customer at a fixed or determinable price for its own account ( fixed-price transaction), with the exception of fixed-price transactions in financial instruments whose provider or issuer is the investment services company itself. In the fixed-price and proprietary trader business, the price is negotiated between the parties or is determined unilaterally by the bank , whereby it has to be based on current market developments at its reasonable discretion . In the fixed-price and proprietary trading business, the bank acts directly as a buyer or seller on the customer. When the bank concludes a hedging transaction, the customer acquires the property directly from the other market participant by virtue of the latter's authorization or the latter acquires the property on the basis of the customer's authorization. In contrast to the commission business , the bank basically bears the risk of sales and price erosion vis-à-vis the customer.

Futures

Forward transactions (in the case of securities , foreign exchange , precious metals , commodities ) are sometimes referred to as fixed-price transactions because the contracting parties agree on a forward rate on the day the transaction is concluded that must be fulfilled on the due date of the forward transaction - regardless of the market development that has occurred in the meantime.

Issuing business

With the fixed price procedure , the bank consortium usually takes on the entire issue at a fixed price ( takeover price ) and offers it to investors at a price above that ( issue price ). It is only used for subscription rights .

Construction industry

Occasionally, a flat rate agreed in a building contract is referred to as a “fixed price” (“flat-rate fixed price”, “fixed price guarantee”). This is often misleading and leads to difficulties of interpretation. On the one hand, a flat rate can also be a "sliding price" if a price sliding clause has been agreed in the contract . On the other hand, the term "fixed price" is often associated with the idea that this price is the final price to be paid, but this is not the case when changes and additional services ( supplements ) are commissioned or the costs caused by disabilities and similar circumstances are to be reimbursed. The final price to be paid can therefore be significantly higher than such an agreed "fixed price".

In construction contracts in the private sector, the client often tries to shift the risk of additional costs to the building contractor by means of certain clauses and thereby achieve that the final amount to be paid is as little as possible higher than the fixed price. The clause "The prices on which the offer of the contractor is based are basically fixed prices and remain binding for the entire duration of the contract" is regarded by the jurisprudence as ineffective, since it contradicts the provisions on general terms and conditions . Such fixed price clauses violate the provision of § 313 BGB, which gives the contracting parties the right to adapt the contract in the event of a disruption of the business basis , puts the contractor at an unreasonable disadvantage and is therefore ineffective according to § 307 para. 1 BGB .

One attempt to achieve a final, binding “fixed price” is the guaranteed maximum price contract that is sometimes agreed on in large construction projects . A complex procedure is used to try to keep the additional costs to be expected within the guaranteed maximum price. In the real estate industry , a fixed price agreement is a contract between a client and a contractor on flat-rate costs for the provision of services .

IT projects

In IT projects, the agile fixed price contract model attempts to set fixed prices after an initial test phase.

Prices of typed services

Services are usually billed according to the time spent. Just as a manufacturer sells the same products at the same prices, regardless of whether the production costs fluctuate occasionally, standardized services are provided that are always provided in the same or comparable manner (e.g. changing wheels, preparing the hotel room, changing lighting in stairwells ) are often billed at constant prices per service unit. These prices are also known as fixed prices because they do not fluctuate according to the amount of work involved.

Legally regulated prices

These fixed prices , also known as external fixed prices or administered prices , are set by the state through laws and are reflected in fixed fees . The legal basis is, among other things, the Federal Fees Act (BGebG), which regulates the levying of fees for public services by authorities . Gross prices are agreed in business dealings with consumers and authorities . These prices remain binding even if the value added tax increases . A price adjustment can only be made if the prices were agreed more than 4 months before the tax change came into effect ( Section 29 UStG ).

The Expert Council for the Assessment of Macroeconomic Development has divided these state administered prices according to the intensity of their influence by the state as follows:

Directly administered prices
Transport tariffs , radio license fees or fees for messaging are set directly by the state and make up 4.6% of the shopping basket .
Partially administered prices
such as public supply tariffs , insurance tariffs , health care or flight tariffs are controlled by the state and are subject to approval by it (shopping cart 10.9%).
Quasi-administered prices
such as gasoline , heating oil , tobacco and alcohol are influenced by the state through the high tax share via the tax burden (shopping basket: also 10.9%).
Indirectly administered prices
Almost the entire food sector is influenced by the state through EU market regulations through minimum, fixed or target prices (shopping basket: 14.9%).

Measured against the shopping basket, 41.3% of goods / services have administered prices.

Transportation

According to Section 39 (3) PBefG , transport fees ( tickets ) in local public transport may not be exceeded or fallen short of; they are to be applied evenly and are therefore fixed prices. This applies to trams , buses , trains and taxis . The taxi tariffs for taxi rides within the so-called compulsory driving area are bindingly set by the respective municipality ( Section 51 (1) PBefG) in order to regulate competition among taxi drivers and to protect customers.

Liberal professions

The remuneration for the services of various freelance professions is regulated by law and is therefore considered a fixed price, as it cannot be changed or can only be changed within a certain framework. In particular it concerns:

There are only price changes if the relevant fee schedule is changed.

economic aspects

For all market participants there is a market risk with fluctuating prices , which manifests itself as a price risk and makes it difficult for them to calculate their transactions during market developments . The price risk is the danger that prices of tangible or intangible goods could rise or fall contrary to planning in the future. However, this price risk does not exist or only to a minor extent if fixed prices are agreed that apply for a certain period of time. The market participant who sets the fixed price bears the price risk alone.

If the fixed price is neither a minimum price nor a maximum price and is identical to the market price, it eliminates price fluctuations over time, but it can also be the result of an inadmissible price agreement by a cartel . The fixed price means that neither market-related price fluctuations nor inflation or deflation have an impact on it. This is also the case with the mostly state-imposed price freeze , where price changes are prohibited by law. It is particularly used in cases of hyperinflation . In economic terms, the price freeze is the wrong means of fighting inflation, because during the price freeze the scarcity relations shift without this being reflected in the prices. After the price freeze, prices have to be increased abruptly because the shortage has not been resolved.

Individual evidence

  1. ^ Timm Gudehus: Dynamic markets: Practice, strategies and benefits for economy and society . 2007, p. 148
  2. ^ Heinrich von Stackelberg: Foundations of theoretical economics . 1951, p. 227
  3. ^ Timm Gudehus: Dynamic markets: Practice, strategies and benefits for economy and society . 2007, p. 146 f.
  4. ↑ Konrad Mellerowicz: Branded articles: The economic laws of their pricing and price fixing . 1955, p. 72
  5. ^ Timm Gudehus: Logistics: Basics - Strategies - Applications . 2010, p. 194
  6. ↑ BT-Drs. 2/1158 Bundestag printed paper II / 1158 of January 22, 1955, draft law against restraints of competition , 1955, p. 36
  7. ↑ only provisional: ECJ, judgment of October 19, 2016, Az .: Case C 148/15
  8. ^ Peter Derleder, Kai-Oliver Knops, Heinz Georg Bamberger (eds.): Handbook on German and European banking law . 2009, p. 1716
  9. ^ Peter Derleder, Kai-Oliver Knops, Heinz Georg Bamberger (eds.): Handbook on German and European banking law . 2009, p. 1688
  10. ↑ BGH, judgment of January 8, 2002, Az .: X ZR 6/00
  11. ↑ BGH, judgment of July 20, 2017, Az .: VII ZR 259/16
  12. ↑ Klaus D. Kappelmann. In: Klaus D. Kappelmann, Burkhard Messerschmidt (Ed.): Commentary VOB . 2nd Edition. 2007, § 2 VOB / B, Rn. 251
  13. ^ Council of Experts for the Assessment of Overall Economic Development, Annual Report 1982/1983 , 1983, p. 244 f.
  14. ↑ the proportion has fallen due to deregulation of the Deutsche Bundespost and Deutsche Bundesbahn .
  15. ↑ GOÄ, full text
  16. ↑ GOP, full text that refers to the GOÄ
  17. ↑ GOT, full text
  18. ↑ GOZ, full text
  19. ^ HOAI, full text
  20. ^ RVG, full text
  21. ↑ StBGebV, full text
  22. ^ Heinrich von Stackelberg, Fundamentals of Theoretical Economics , 1951, p. 229
  23. ^ Timm Gudehus: Dynamic markets: Practice, strategies and benefits for economy and society . 2007, p. 148