HI Rohit,
If you maintain plant specific conditions then price will be taken from that plant specific conditions.. or else the price will be taken from the main line item of the contract..
This plant specific conditions are useful to negotiate specific price with respect to each plant with vendor..
So the standard SAP will allow both the ways...
For better understanding read below link...
http://help.sap.com/saphelp_470/helpdata/en/75/ee0f0c55c811d189900000e8322d00/content.htm
Regards
Satish