In DAZN Ltd v Coupang Corp [2025] EWCA Civ 1083 ('DAZN'), the Court of Appeal (Newey LJ; Arnold LJ; Popplewell LJ) dismissed an appeal against a first instance decision that a legally binding contract had been formed between two parties (the 'contractants') in respect to broadcasting rights for the FIFA Club World Cup 2025. In doing so, Popplewell LJ (with whom Arnold LJ and Newey LJ agreed on this issue), considered the law as to when a legally binding contract will form, though the would-be contractants/contractants, recognise that some matters are still to be agreed. Under the heading 'The law', Popplewell LJ, at paragraphs 5 to 11, said:

'5. The legal principles applicable were not substantially in dispute. In Smit Salvage BV v Luster Maritime SA (The Ever Given) [2024] EWCA Civ 260 [2024] 2 All E.R. (Comm) 504 | [2024] 2 Lloyd's Rep. 86, Males LJ said:

"18. The principles to be applied in deciding whether parties have concluded a legally binding contract even though they recognise that some matters are still to be agreed are well established and were not disputed. The leading cases are RTS Flexible Systems Ltd v Molkerei Alois Mueller GmbH & Co KG [2010] UKSC 14, [2010] 1 WLR 753, Pagnan SpA v Feed Products Ltd [1987] 2 Lloyd's Rep 601, and Global Asset Capital Inc v Aabar Block Sarl [2017] EWCA Civ 37, [2017] 4 WLR 163.

19. In summary, it is well established that the whole course of the parties' negotiations must be considered; that it is possible for parties to conclude a binding contract even though it is understood or agreed that a formal document will follow which may include terms which have not yet been agreed; that whether this is what the parties intend to do must be determined by an objective appraisal of their words and conduct; and that the burden lies on the party asserting that such a contract has been concluded to establish that it has.

20. There are well-known formulae which can be used to make clear that parties have not yet reached the stage of a binding contract, such as 'subject to contract' or, in a maritime context, 'subject details' or 'fixed on subjects', but the absence of such terms (which were not used in the present case) is not decisive. All depends on the parties' words and conduct towards each other, considered in their context."

6. Four aspects of these principles merit further observation. The first is the particular importance of the requirement that the Court should look at the whole of the negotiations between the parties, both before and after those which are said to constitute the making of a binding contract. In Global Asset v Aabar, Hamblen LJ said:

"28. It is well established that when deciding whether a contract has been made during the course of negotiations the court will look at the whole course of those negotiations –see Hussey v HornePayne (1878) 4 App Cas 311.

29. As Lord Cairns observed in that case at 316:

"…You must not at one particular time draw a line and say "We will look at the letters up to this point and find in them a contract or not, but we will look at nothing beyond". In order fairly to estimate what was arranged and agreed, if anything was agreed between the parties, you must look at the whole of that which took place and passed between them".

30. The rationale of this approach is that focusing on one part of the parties' communications in isolation, without regard to the whole course of dealing, can give a misleading impression that the parties had reached agreement when in fact they had not - see Lord Selborne in Hussey at 323."

7. The rationale identified in [30] applies equally to the converse. Focusing on one part of the parties' communications in isolation, without regard to the whole course of dealing, can give a misleading impression that the parties had not reached agreement when in fact they had.

8. As Longmore LJ observed in GNER v Avon Insurance [2001] 2 Lloyd's Rep 649 at [29], a focus on what the parties have said after the moment at which it is contended that a contract was concluded may be very relevant to whether a term has been agreed. It may equally be very relevant to whether a concluded contract has been made. This is because, in the memorable phrase of Bingham J in Pagnan, the parties are the masters of their contractual fate in deciding what terms they regarded it as essential should be agreed in order for a binding agreement to come into effect (see Lloyd LJ in Pagnan at p. 619 RHC at (6)). If subsequent communications show that the parties considered themselves to have made a binding agreement notwithstanding that further terms remained to be agreed or a further document executed, that is powerful evidence that such a binding agreement was made.

9. Secondly, where the parties have agreed that there will be a subsequent formal written contract, the question of whether their agreement is subject to contract, in the sense that they do not intend it to have legal effect unless and until such a formal contract is signed, will be heavily dependent on whether they have agreed all the terms which they regard as essential, or whether there is to be left to the subsequent contract agreement of terms which the parties regard as significant to their rights and liabilities. This too is an aspect of the principle that the parties are the masters of their contractual fate. Two cases illustrate this approach. In British Steel Corporation v Cleveland Bridge and Engineering Co Ltd [1984] 1 All ER 504, Robert Goff J held that no contract had been concluded when it was contemplated that it would be subject to standard terms but without agreement on whose terms, and the standard terms of the parties contained very different liabilities for defective goods and delay. By contrast in Immingham Storage Company v Clear Plc [2011] EWCA Civ 89, 135 Con LR 224, this court upheld an agreement in which there was to be a subsequent formal contract but the parties had agreed "all the terms of any significance to a contract of the type under consideration." David Richards J, giving the judgment of this court, said at [26]:

"[26] These factors point, overwhelmingly in our judgment, to an intention to create a contract if the claimant accepted the defendant's offer. Set against those factors, the provision that a 'formal contract will then follow in due course' does not indicate that the claimant's acceptance of the signed quotation will be no more than an agreement subject to contract. It is, as stated by Parker J in Von Hatzfeldt-Wildenburg v Alexander [1912] 1 Ch 284 at 289, [1911–13] All ER Rep 148 at 151, 'a mere expression of the desire of the parties as to the manner in which the transaction already agreed to will in fact go through'".

10. Thirdly, in construing written communications between the parties, it is important to recognise that business people conducting commercial negotiations will often not use the precision of language which lawyers aspire to in contract drafting. Their language may be imprecise, ungrammatical and impressionistic. Their communications must be interpreted by reference to the substance and sense of what is said, not by the kind of intense examination of the words, syntax and grammar to which a contract carefully drafted by lawyers may be subjected.

11. Fourthly, it will be relevant if the parties' negotiations take place in a context where performance of any agreement reached is urgent. If so, that makes it more likely that the parties would wish to be bound notwithstanding that further details may remain to be agreed or a formal contract drawn up.'.

On the facts, in respect to a series of emails (the communications), Popperwell LJ said, at paragraph 15:

'Applying the legal principles which I have identified and looking at the communications as a whole, it seems clear to me that the parties had reached an agreement by which they intended to be immediately and legally bound by the exchange of the emails in question.'

Note, the above scenario is subletly different to the scenario where the contractants / would-be contractants expressly deal with an issue (for instance, what the price for the product/service being purchased, will be) in their (putative) contract by stipulating that they will agree the issue (the price) at a later date. For a case on this scenario, see KSY Juice Blends UK Ltd v Citrosuco GmbH [2025] EWCA Civ 760 (Baker LJ; Popplewell LJ; Zacaroli LJ).

Further Authorities

(1) In Rotam Agrochamical Co Ltd v GAT Microencapsulation GmbH [2018] EWHC 2765 (Comm) ('Rotam'), Butcher J, under the heading 'Applicable Legal Principles', said, at paragraphs 139 to 143:

'The legal principles as to whether or not a binding contract has been concluded were restated by the Supreme Court in RTS Flexible Systems Ltd v Molkerei Alois Müller GmbH & Co KG [2010] UKSC 14; [2010] 1 WLR 753 at [45]:

"The general principles are not in doubt. Whether there is a binding contract between the parties and, if so, upon what terms depends upon what they have agreed. It depends not upon their subjective state of mind, but upon a consideration of what was communicated between them by words or conduct, and whether that leads objectively to a conclusion that they intended to create legal relations and had agreed upon all the terms which they regarded or the law requires as essential for the formation of legally binding relations. Even if certain terms of economic or other significance to the parties have not been finalised, an objective appraisal of their words and conduct may lead to the conclusion that they did not intend agreement of such terms to be a pre-condition to a concluded and legally binding agreement".

The following passage from the judgment of Lloyd LJ in Pagnan SpA v Feed Products Ltd [1987] 2 Lloyd's Rep 610 was cited by the Supreme Court with approval:

"(1) In order to determine whether a contract has been concluded in the course of correspondence, one must first look to the correspondence as a whole … (2) Even if the parties have reached agreement on all the terms of the proposed contract, nevertheless they may intend that the contract shall not become binding until some further condition has been fulfilled. That is the ordinary 'subject to contract' case. (3) Alternatively, they may intend that the contract shall not become binding until some further term or terms have been agreed … (4) Conversely, the parties may intend to be bound forthwith even though there are further terms still to be agreed or some further formality to be fulfilled … (5) If the parties fail to reach agreement on such further terms, the existing contract is not invalidated unless the failure to reach agreement on such further terms renders the contract as a whole unworkable or void for uncertainty. (6) It is sometimes said that the parties must agree on the essential terms and it is only matters of detail which can be left over. This may be misleading, since the word 'essential' in that context is ambiguous. If by 'essential' one means a term without which the contract cannot be enforced then the statement is true: the law cannot enforce an incomplete contract. If by 'essential' one means a term which the parties have agreed to be essential for the formation of a binding contract, then the statement is tautologous. If by 'essential' one means only a term which the court regards as important as opposed to a term which the court regards as less important or a matter of detail, the statement is untrue. It is for the parties to decide whether they wish to be bound and if so, by what terms, whether important or unimportant. It is the parties who are, in the memorable phrase coined by the judge [at p 611] 'the masters of their contractual fate'. Of course the more important the term is the less likely it is that the parties will have left it for future decision. But there is no legal obstacle which stands in the way of the parties agreeing to be bound now while deferring important matters to be agreed later. It happens every day when parties enter into so-called 'heads of agreement'."

In determining whether or not a contract has been concluded through communications between the parties, it is necessary to consider communications subsequent to the date of the alleged contract. In the words of Earl Cairns LC in Hussey v HornePayne (1879) 4 App Cas 311:

"You must not at one particular time draw a line and say, 'We will look at the letters up to this point and find in them a contract or not, but we will look at nothing beyond'. In order fairly to estimate what was arranged and agreed, if anything was agreed between the parties, you must look at the whole of that which took place and passed between them."

As to agreements "subject to contract", this area was addressed by Beatson J in Benourad v Compass Group plc [2010] EWHC 1882 (QB) at [106(a)]:

'"[T]he more complicated the subject matter the more likely the parties are to want to enshrine their contract in some written document to be prepared by their solicitors. This enables them to review all the terms before being committed to any of them. The commonest way of achieving this ability is to stipulate that the negotiations are 'subject to contract'. In such a case there is no binding contract until the formal written agreement has been duly executed …. But it is not necessary that there should have been an express stipulation that the negotiations are to be 'subject to contract'. …": Cheverney Consulting Ltd v Whitehead Mann Ltd [2006] EWCA Civ 1303 at [42], per Sir Andrew Morritt C; Investec Bank (UK) Ltd v Zulman [2010] EWCA Civ. 536 at [17]. Where there is no such stipulation, this (see e.g. Winn v Bull (1877—78) LR 7 Ch 29, 32, per Jessel MR) is a question of construction.

The fact that a draft contractual document or a covering letter to it invites a party to initial or sign a copy and return it to the other party, or contemplates that a party would obtain legal advice before signing are telling indications that the parties do not intend to be bound until the document is signed: Investec Bank (UK) Ltd v Zulman [2010] EWCA Civ. 536 at [19—20]."

Finally, I note that it is possible for parties to agree to a binding preliminary contract, pending the agreement. I was referred to the following passage from the judgment of Pain J in Donwin Productions Limited v Emi Films Limited (Times, March 9, 1984):

"It is clearly the law that parties may make a preliminary arrangement which may either be an enforceable agreement pending the completion of a fuller and more complete written agreement, or which is to have no effect pending the completion of such written agreement…

Whether the preliminary agreement is to have contractual force or not will depend upon the intention of the parties. Mr. Bowsher seemed to suggest that there could be no binding agreement on the 4th June because the parties recognised at that stage that there were further terms to be agreed and embodied in the final written agreement. This is not a valid contention of law. It has considerable force when one is examining the evidence to ascertain the intention of the parties but as a matter of law there is no reason why one cannot have a partial binding agreement pending the completion of the full agreement.

Initially the burden is on the Plaintiff to prove that it was the intention of the parties that there should be a binding agreement but if he can show: (1) that there was a commercial relationship between the parties; (2) that there was a meeting of minds; and (3) that consideration passed from the Plaintiff to the Defendant, then the onus shifts to the Defendant to prove that there was no intention to create a binding agreement …"'

(2) In Hermes House NW2 Ltd [2026] EWHC 1037 (Ch), Deputy ICC Judge Kyriakides quoted Rotam, paragraphs 139-143, before adding:

'201. [Counsel for the Respondent] also drew my attention to the following additional principles, which were not disputed by [counsel for the Applicant]:

201.1. under the objective test, an apparent intention to be bound by the offeror may suffice so that the offeror may be bound if their words or conduct are such as to induce a reasonable offeree to believe that he intends to be bound, even if, in fact, he has no such intention, and the offeree gives a final and unqualified expression of assent to the terms of the offer. However, whether an offeror is actually bound by an acceptance of their apparent offer will depend upon the state of mind of the offeree so that if the offeree actually and reasonably believes that the offeror has the requisite intention, the objective test is satisfied so that the offeree can hold the offeror to his offer. However, if the offeree knows that, in spite of the objective appearance, the offeror does not have the requisite intention, the offeror is not bound (Chitty on Contract, 36 th edition at 4-002-4-004, 4-032);

201.2. in determining whether an offer has been made with the requisite intention to be bound by it, the court will look at whether the language used is committal or non-committal and whether it was reasonable for the other party to expect further negotiations. The appropriate analysis will therefore depend upon whether the communication or conduct evinces the appropriate degree of commitment, and of certainty and finality as to terms (Chitty on Contracts at 4-012-4-013);

201.3. an agreement may not have contractual effect if, among other things:

201.3.1. it is so vague or uncertain that no definition can be given to it without adding further terms. Thus, an agreement to agree or an agreement to negotiate is too uncertain to have any contractual force (Chitty on Contracts at 4-169-4-170, 4-188);

201.3.2. if an offer is made in jest or anger or at least if this fact is obvious to the person to whom the statement is made. In this respect, I was also referred to Blue v Ashley [2017] 1928 (Comm) at [56];

201.3.3. if the promisee does not provide something of value in exchange for the promise. However, if it is clear that the promise would have accomplished the act or forbearance anyway, even if the promise had not been made, then refraining from a course of conduct that was never intended to be pursued will not be valuable consideration. In these cases, the burden of proof is on the promisor to show that the promisee would (even if the promise had not been made) definitely have accomplished the act or forbearance in question (Chitty on Contracts at 6-003 and 6-027);

201.3.4. if it is an agreement on one issue out of a wide-ranging discussion about multiple issues, unless there was a segregation or distinction made between that issue and other matters on which no binding agreement was reached. In support of this proposition, in addition to Chitty, he relied on George v Revenue and Customs Commissioners [2018] UKFTT 509 TC at [96] and [99].' [bold added]

The word 'may' in paragraph 201.3 does need to be considered. Paragraph 201.3.1, second sentence, is perhaps too broad-brush on 'agreements to agree' - see KSY Juice Blends UK Ltd v Citrosuco GmbH [2025] EWCA Civ 760

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