In KSY Juice Blends UK Ltd v Citrosuco GmbH [2025] EWCA Civ 760, CA ('KSY Juice'), the Court of Appeal (Zacaroli LJ; Popplewell LJ; Baker LJ) considered contract formation and, in particular, the law surrounding 'agreements to agree'. When will a legally enforceable contract be formed (or part of a contract be legally enforceable[1]), and when will one not be, where:
(a) the (would-be) contract contains a provision for how an essential issue/matter is to be fixed (a 'how it is to be fixed' provision, so to speak). The (would-be) contract is not simply silent on how the essential issue/matter is to be fixed; and
(b) that 'how it is to be fixed' provision, specifies that it is to be fixed by a further agreement between the parties (necessarily, at some future point in time).
A few preliminary points
There are a few preliminary points to quickly make, before KSY Juice is considered in detail:
(a) to repeat - the situation under consideration in KSJ Juice and this article, is different from the situation where there is no 'how it is to be fixed' provision (i.e. the contract is silent on how the essential issue/matter is to be fixed)[2];
(b) the issue/matter will be an essential issue/matter in the (would-be) contract (for instance, in a sale of goods or services contract, the price, or quantity), but for brevity, this will simply be referred to as the 'issue/matter';
(c) the decision in KSJ Juice concerned the delivery of 400 metric tonnes ('400MT') and 800 metric tonnes ('800MT') of a certain product, but these quantities were subject to variation due to 'free trucks'. To avoid unnecessarily complicating the details, due to variation to these quantities due to 'free trucks', this article will simply keep to the notional quantities 400MT and 800MT respectively.
Review of Authorities
Under the heading 'The legal principles', Zacaroli LJ (with whom Popplewell LJ and Baker LJ agreed) reviewed the cases of: (a) May & Butcher Ltd v The King [1934] 2 KB 17 ('May & Butcher'); (b) Hillas & Co v Arcos Limited [1932] 147 LT 503 ('Hillas'); (c) Foley v Classique Coaches Limited [1934] KB 1; (d) G Scammell & Nephew Ltd v Ouston [1941] AC 251 ('Scammell'); (e) Mamidoil-Jetoil Greek Petroleum Company SA v OKTA Crude Oil Refinery AD [2001] EWCA Civ 406; [2001] 2 Lloyds' Rep 76 ('Mamidoil'); and (f) BJ Aviation Ltd v Pool Aviation Ltd [2002] EWCA Civ 163 ('BJ Aviation'), as well as section 8(2) of the Sale of Goods Act 1979 (and its predecessor s.8 of the Sale of Goods Act 1893).
Zacaroli LJ's full review is set out in a footnote[3]; it is here only necessary to set out his review of: (a) Mamidoil; and (b) BJ Aviation, which can be found in paragraphs 35 to 37:
'The authorities were reviewed and summarised by Rix LJ (with whom Schiemann LJ and Sir Roger Waterhouse agreed) in Mamidoil-Jetoil Greek Petroleum Company SA v OKTA Crude Oil Refinery AD [2001] EWCA Civ 406; [2001] 2 Lloyds' Rep 76 ("Mamidoil").
Rix LJ (at §69) distilled 10 principles from the authorities (with sub-paragraph numbers added):
"i) Each case must be decided on its own facts and on the construction of its own agreement. Subject to that:
ii) Where no contract exists, the use of an expression such as "to be agreed" in relation to an essential term is likely to prevent any contract coming into existence, on the ground of uncertainty. This may be summed up by the principle that "you cannot agree to agree".
iii) Similarly, where no contract exists, the absence of agreement on essential terms of the agreement may prevent any contract coming into existence, again on the ground of uncertainty.
iv) However, particularly in commercial dealings between parties who are familiar with the trade in question, and particularly where the parties have acted in the belief that they had a binding contract, the Courts are willing to imply terms, where that is possible, to enable the contract to be carried out.
v) Where a contract has once come into existence, even the expression "to be agreed" in relation to future executory obligations is not necessarily fatal to its continued existence.
vi) Particularly in the case of contracts for future performance over a period, where the parties may desire or need to leave matters to be adjusted in the working out of their contract, the Courts will assist the parties to do so, so as to preserve rather than destroy bargains, on the basis that what can be made certain is itself certain…
vii) This is particularly the case where one party has either already had the advantage of some performance which reflects the parties' agreement on a long term relationship, or has had to make an investment premised on that agreement.
viii) For these purposes, an express stipulation for a reasonable or fair measure or price will be a sufficient criterion for the courts to act on. But even in the absence of express language, the Courts are prepared to imply an obligation in terms of what is reasonable.
ix) Such implications are reflected but not exhausted by the statutory provision for the implication of a reasonable price now to be found in s. 8(2) of the Sale of Goods Act, 1979 (and, in the case of services, in s.15(1) of the Supply of Goods and Services Act, 1982).
x) The presence of an arbitration clause may assist the Courts to hold a contract to be sufficiently certain or to be capable of being rendered so, presumably as indicating a commercial and contractual mechanism, which can be operated with the assistance of experts in the field, by which the parties, in the absence of agreement, may resolve their dispute."
The Court of Appeal returned to this topic the following year in BJ Aviation Ltd v Pool Aviation Ltd [2002] EWCA Civ 163 ("BJ Aviation"). In that case, an agreement for the operation of an airport contained a term entitling the operator to serve a notice requesting renewal for a further seven years "subject to the re-negotiation of the rent…". The Court of Appeal concluded that this was an unenforceable agreement, as re-negotiation of the rent was a condition precedent to the obligation to grant a fresh agreement. Chadwick LJ (with whom Schiemann LJ and Sir Murray Stuart-Smith agreed) distilled the following five propositions from the authorities:
"20. First, each case must be decided on its own facts and on the construction of the words used in the particular agreement. Decisions on other words, in other agreements, construed against the background of other facts, are not determinative and may not be of any real assistance.
21. Secondly, if on the true construction of the words which they have used in the circumstances in which they have used them, the parties must be taken to have intended to leave some essential matter, such as price or rent, to be agreed between them in the future - on the basis that either will remain free to agree or disagree about that matter - there is no bargain which the courts can enforce.
22. Thirdly, in such a case, there is no obligation on the parties to negotiate in good faith about the matter which remains to be agreed between them —see Walford v. Miles [1992] A.C. 128, at page 138G.
23. Fourthly, where the court is satisfied that the parties intended that their bargain should be enforceable, it will strive to give effect to that intention by construing the words which they have used in a way which does not leave the matter to be agreed in the future incapable of being determined in the absence of future agreement. In order to achieve that result the court may feel able to imply a term in the original bargain that the price or rent, or other matter to be agreed, shall be a "fair" price, or a "market" price, or a "reasonable" price; or by quantifying whatever matter it is that has to be agreed by some equivalent epithet. In a contract for sale of goods such a term may be implied by section 8 of the Sale of Goods Act 1979. But the court cannot imply a term which is inconsistent with what the parties have actually agreed. So if, on the true construction of the words which they have used, the court is driven to the conclusion that they must be taken to have intended that the matter should be left to their future agreement on the basis that either is to remain free to agree or disagree about that matter as his own perceived interest dictates there is no place for an implied term that, in the absence of agreement, the matter shall be determined by some objective criteria of fairness or reasonableness.
24. Fifthly, if the court concludes that the true intention of the parties was that the matter to be agreed in the future is capable of being determined, in the absence of future agreement, by some objective criteria of fairness or reasonableness, then the bargain does not fail because the parties have provided no machinery for such determination, or because the machinery which they have provided breaks down. In those circumstances the court will provide its own machinery for determining what needs to be determined —where appropriate by ordering an inquiry (see Sudbrook Trading Estate Ltd v. Eggleton [1983] A.C. 444)."'
KSJ Juice
In KSJ Juice, the Court built on the authorities of Mamidoil and BJ Aviation. The approach adopted was that the 'how it is to be fixed' provision (as it has been labelled in this article) must be considered. What was the true intention of the parties in respect to the issue/matter? Zacaroli LJ distilled the pivotal question to be '...whether ... the parties entered into a binding agreement not dependent on any future agreement for its validity or ... the parties left a term to be agreed between them in the future on the basis that either will remain free to agree or disagree about that matter (and, I would add, by reference to their separate commercial interests).' Where it is the former, there is a legally binding contract; where it is the latter, there is no legally binding contract.
To put this in another way. The pivotal question is: was the true intention of the parties that the contract was:
(a) not dependent on any future agreement for its validity. Future agreement was envisaged to be the first mechanism for fixing (i.e. determining/reaching an answer on) the issue/matter, but it was not intended that it be the only method of fixing the issue/matter. The parties intended that, if the parties later were unable, at the future date, to reach an agreement on the issue/matter (i.e. unable to agree upon a certain figure/quantity etc.), the issue/matter would be fixed using some particular objective criteria/standard (typically, applying a 'reasonable' or 'market' standard to the issue/matter). In other words, the parties intended that there should be an other mechanism, which would 'kick in' as a 'back up' (so to speak), in the event that the parties were, subsequently, unable to reach a further agreement on the issue/matter; or
(b) dependent on further agreement for its validity. The issue/matter was left to be agreed between the parties, in the future on the basis that, either would remain free to agree or disagree about that issue/matter. The corollary of that freedom to agree or disagree being that, if the parties choose not to agree/are unable to agree, no other mechanism would 'kick in' as a 'back up'. This is an 'agreement to agree', pure and simple.
In the situation under consideration, the (would-be) contract contains an 'agreement to agree' clause as its 'how it is to be fixed' provision. This means that, the Court must look to the wider context, for it to be able to determine whether it can imply a term into the (would-be) contract - the 'back up' mechanism (term), that: in the absence of the parties reaching agreement at some future time on the issue/matter to be fixed, the issue/matter to be fixed will be fixed by the following objective criteria/standard: 'reasonable X' or 'market Y' (the 'Implication'). In Hillas, Lord Wright referred to this as the '...implication in reserve' (Hillas, p.505).
Finding the Implication
The (i) nature of the (would-be) contract, (ii) type of trade and (iii) the familiarity of the parties to that trade, can influence the willingness of the Court to find the Implication. As part of Zacaroli LJ's review of the authorities, Zacaroli LJ, at paragraph 34, quoted from Lord Maugham in Scammell, at p.255, who said (having noted the general proposition that parties to a contract must express themselves so that their meaning could be determined with a reasonable degree of certainty):
'This general rule, however, applies somewhat differently in different cases. In commercial documents connected with dealings in a trade with which the parties are perfectly familiar the court is very willing, if satisfied that the parties thought that they made a binding contract, to imply terms and in particular terms as to the method of carrying out the contract which it would be impossible to supply in other kinds of contract.'
On the facts in KSJ Juice, Zacaroli LJ found, at paragraph 56, that 'The subject matter of the contract is a trade with which the parties were "perfectly familiar"...'
And that, for various additional reasons[4], the facts in KSJ Juice were '..firmly in the territory of those contracts which a court will strive to uphold.' (paragraph 58)
Difficulty in finding Implication - as no readily available way to fix, based on an objective criteria/standard
One impediment to the Court concluding that the parties intended there to be a 'back up' mechanism for fixing the issue/matter, is where the parties will have been able to see that, it would too difficult for the Court to ascertain a 'reasonable X' or a 'market Y' in the circumstances.
This issue arose in KSJ Juice. In KSJ Juice, there were two parts to the contract of supply. Keeping to the simplified facts (explained at the start):
(a) the first part was: 400MT at an agreed upon price (all parties accepted that this part of the contract was legally enforceable[5]);
(b) the second part was 800MT at a 'open price to be fixed...' (this was, as will be apparent, the 'how it is to be fixed' provision; Zacaroli LJ ultimately accepted it should be read[6] as specifying/containing an 'agreement to agree').
The product being supplied was Wesos, essentially the residue of orange juice pulp, left over when the juice from oranges is extracted (paragraph 5). Zacaroli LJ explained, at paragraph 59 (while speaking of whether the implication could be made):
'The strongest potential obstacle in the way of doing so is if the difficulty of ascertaining a reasonable or market price is such that the parties cannot reasonably have intended that the price would be set by reference to it. Put another way, if the parties knew or ought reasonably to have been aware that there was no readily available objective standard by which the price could be ascertained, then they must have intended that they were free to negotiate by reference to their own commercial interests. If so, a court would be ill-equipped to identify a "reasonable" price.'
Zacaroli LJ in KSJ Juice continued, at paragraph 60:
'An example of this is provided by Morris v Swanton Care & Community Limited [2018] EWCA Civ 2763. The question in that case was whether a provision relating to "Earn-Out Consideration" which gave a party an option to provide services for a period of four years "and following such period such further period as shall reasonably be agreed between [them]" was unenforceable as a mere agreement to agree. Gloster LJ, at §28, concluded that the requirement of reasonableness applied to the process of agreeing and not to the period. Even if it had done, however, the difficulty was that:
"it presupposes that there is such a thing as a reasonable period which everyone could equally recognise as being reasonable, rather than the different commercial interests and different perspectives involved in any extension of the Earn-Out Consideration. Moreover the court would have to identify some objective benchmark for determining the reasonable period without reaching an alternative subjective view or descending into the commercial fray: but that is not possible."'
On the facts in KSJ Juice, there was:
(a) no 'sufficiently transparent market' - 'from which the price at which entities bought and sold Wesos could be observed.' (paragraph 62); however
(b) there was 'an established transparent market' (paragraph 66) in relation to a linked product, namely reconstituting frozen concentrated orange juice (FCOJ), and it had been accepted (paragraph 69) that the price of Weso tracked the price of FCOJ, subject to a 70% discount (paragraph 66).
The result was that '...the difficulties are not such as to preclude the parties having intended to conclude a binding contract on the basis that the price would be fixed by reference to an objectively reasonable price, if necessary by a court, in the absence of agreement.' (paragraph 66).
Conclusion
In simply terms, there is a well-known principle that, where an essential ingredient of a (would-be) contract, is stipulated in the (would-be) contract to be left to be agreed later by the parties, there is no contract: May & Butcher, per Viscount Dunedin at p.21. Later authorities have however identified that the law is not quite so straightforward. Though the parties may have stipulated (in their 'how it is to be fixed' provision) that the issue/matter is to be left to be agreed later by the parties, the question is, whether the true intention of the parties was that the parties later agreement was to be:
(a) the only mechanism for fixing (determine/reaching an answer on) the issue/matter left open; or
(b) there was to be a 'back up' mechanism available, to be utilised, where the parties are unable later to reach further agreement. Where such was the true intentions of the parties, this 'back up', secondary mechanism, can be implied in (the 'Implication'), and then used, to fix (determine/reaching an answer on) the issue/matter left open.
The question is: '...whether ... the parties entered into a binding agreement not dependent on any future agreement for its validity or ... the parties left a term to be agreed between them in the future on the basis that either will remain free to agree or disagree about that matter (and, I would add, by reference to their separate commercial interests).' (KSJ Juice, paragraph 53). Where it is the former, there is a legally binding contract; where it is the latter, there is no legally binding contract.
On the facts in KSJ Juice , Zacaroli LJ held that the 800MT element of the contract was valid and enforceable. This was because, the true intention of the parties was that the Implication was to apply. The 'how it is to be fixed' provision was accompanied by the Implication that, in the absence of further agreement between the parties, a reasonable or market price was to be used to fix the price to be paid. In respect to this element, Zacaroli LJ said, at paragraph 75:
'...this is a case where a term is to be implied to the effect that the price of Wesos...was to be fixed, in the absence of agreement, as a reasonable or market price.'
Supreme Court
Note, an application in this case has been lodged in the Supreme Court, for permission to appeal. See this listing.
Collatory Case Series
The Collatory Case Series, is an series of bulletins, designed to report that one case which collates the essential principles/propositions of law, for a particular doctrine/area of law. It is not designed as a deep and comprehensive review of an area of law, but to provide that quick 'go to' case.
SIMON HILL © 2025*
BARRISTER
33 BEDFORD ROW
NOTICE: This article is provided free of charge for information purposes only; it does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by any member of Chambers or by Chambers as a whole, or the Copyright holder. No attempt has been made to provide an exhaustive review/account of the law in this area. *Copyright is owned by Barrister Search Limited.
[1] It can be 'part of a contract', in the sense, that: there can be a contract for the sale of multiple goods, for which each has its own provisions. That, for the sale of:
(a) some goods, the contract contains provisions which fix all the (essential) issues/matters, by mechanisms other than 'by further agreement of the parties' (or words to that effect); but
(b) (at least) one good, the contract contains provisions which fix all the issues/matters, but at least one of the mechanisms for fixing one of the issues/matters, is 'by further agreement of the parties' (again, or words to that effect);
Also within the contract, is a severance clause. It is helpful to use the facts in KSY Juice Blends UK Ltd v Citrosuco GmbH [2025] EWCA Civ 760, CA ('KSY Juice'), to explain. In KSY Juice, in simple terms, the contract was for the supply of Wesos (orange pulp) in the following quantities:
(a) 400MT - price fixed.
(b) 800MT - 'open price to be fixed...'
The contract in KSY Juice also contained a servance clause. Clause 17 of the relevant contract read (paragraph 19):
'the parties hereto intend this Agreement to be valid and enforceable to the fullest extent possible."
As to this, Zacaroli LJ in KSY Juice said 'Accordingly, they agreed that if any term was found to be invalid or unenforceable it was to be severed from the remainder of the agreement.' (paragraph 19).
The litigation in KSY Juice progressed on the basis that:
(a) the contract was valid and enforceable in respect to the 400MT quantity.
(b) the issue was, whether the 800MT quantity part of the contract, was invalid and unenforceable, as simply an agreement to agree on an essential issue/matter. And if it was, it was clear the severance clause would stop this invalidating the whole contract.
[2] Where the contract is silent on the issue:
(a) for a sale of goods contract - see s.8 of the Sale of Goods Act 1979; and
(b) for a sale of good services - see s.15 of the Supply of Goods and Services Act 1982.
A contract with a 'how it is to be fixed' provision for an issue/matter, is fundamentally different, to a contract which does not contain one (i.e. the contract is silent on the topic of how the issue/matter is to be fixed).
In KSY Juice Blends UK Ltd v Citrosuco GmbH [2025] EWCA Civ 760 ('KSY Juice'), CA, Zacaroli LJ:
(a) said 'Section 8(2) of the Sale of Goods Act 1979 contains materially the same language as the first sentence of s.8(2) in the 1893 Act.' (KSY Juice, paragraph 26); and
(b) recorded how Viscount Dunedin in & Butcher v The King [1934] 2 KB 17 had held that s.8 of the Sale of Goods Act 1893 did not apply where the contract contained a 'how it is to be fixed' provision, rather than simply being silent on how the issue/matter is to be fixed. Zacaroli LJ in KSY Juice said, at paragraphs 23, 25, 27-28:
'23...May & Butcher Ltd v The King [1934] 2 KB 17 per Viscount Dunedin at p.21. In that case, the seller agreed to purchase all the seller's tentage which might become available during a certain period, at a price that "shall be agreed upon from time to time".
...
25. It had been argued in May & Butcher that, since the fixing of the price had broken down "a reasonable price must be assumed". This was based on s.8 of the Sale of Goods Act 1893, which provided as follows:
"(1) The price in a contract of sale may be fixed by the contract, or may be left to be fixed in manner thereby agreed, or may be determined by the course of dealing between the parties.
(2) Where the price is not determined in accordance with the foregoing provisions the buyer must pay a reasonable price. What is a reasonable price is a question of fact dependent on the circumstances of each particular case."
...
27. The argument was rejected, on the basis that s8(2) had no application where the contract itself contained provision for how the price was to be fixed, namely pursuant to a further agreement between the parties. Viscount Dunedin put it as follows, at p.21:
"The simple answer in this case is that the Sale of Goods Act provides for silence on the point and here there is no silence, because there is a provision that the two parties are to agree."
28. He expanded on this at p.22:
"It is said that this case is to be treated on the same footing as if there had been no fixing of the price; as if the contract had been silent as to the price, and the law may then imply a reasonable price; but in the present case the facts preclude the application of any such principle. To do that would not be to imply something about which the parties have been silent; it would be to insert in the contract a stipulation contrary to that for which they have bargained to give them, not the result of their own agreement, but possibly the verdict of a jury, or some other means of ascertaining the stipulated price. To do that would be to contradict the express terms of the document which they have signed."'
While illuminating, it is noted here that this address the nuance in the law, identified by subsequent authorities (and which is the kernal of the later authorities, including KSY Juice). On this, Zacaroli LJ said, at paragraph 29:
'May & Butcher must be read in the light of a number of subsequent authorities in which the courts have found a contract to be enforceable, notwithstanding the absence of an agreement on price, even where the parties have expressly left the price to further agreement between them.'
[3] In KSY Juice Blends UK Ltd v Citrosuco GmbH [2025] EWCA Civ 760, CA, Zacaroli LJ (with whom Popplewell LJ and Baker LJ agreed), under the heading 'The legal principles', said at paragraphs 23 to 37:
'23. It is common ground that there was a valid and enforceable agreement as to the supply of the (notional) amount of 400MT each year. Citrosuco's contention that the contract is unenforceable in relation to the further amount of 800MT each year is based on the well-known principle that, price being an essential ingredient of a contract, if it is left to be agreed later by the parties, then there is no contract: May & Butcher Ltd v The King [1934] 2 KB 17 per Viscount Dunedin at p.21. In that case, the seller agreed to purchase all the seller's tentage which might become available during a certain period, at a price that "shall be agreed upon from time to time".
24. Mr Corby, who appeared for Citrosuco, cited numerous sources to similar effect, in particular Chitty on Contracts, 35th ed., at §4-174 ("the most natural inference to be drawn from the fact that the parties left such an important matters as to the price to be settled by further agreement was that they did not intend to be bound until they had agreed on price") and Benjamin's Sale of Goods, 12th ed., at §2-046 ("If the price is left to be agreed upon subsequently between the parties, there will ordinarily be no binding contract, on the grounds of uncertainty, unless and until they later reach agreement on a price").
25. It had been argued in May & Butcher that, since the fixing of the price had broken down "a reasonable price must be assumed". This was based on s.8 of the Sale of Goods Act 1893, which provided as follows:
"(1) The price in a contract of sale may be fixed by the contract, or may be left to be fixed in manner thereby agreed, or may be determined by the course of dealing between the parties.
(2) Where the price is not determined in accordance with the foregoing provisions the buyer must pay a reasonable price. What is a reasonable price is a question of fact dependent on the circumstances of each particular case."
26. Section 8(2) of the Sale of Goods Act 1979 contains materially the same language as the first sentence of s.8(2) in the 1893 Act .
27. The argument was rejected, on the basis that s8(2) had no application where the contract itself contained provision for how the price was to be fixed, namely pursuant to a further agreement between the parties. Viscount Dunedin put it as follows, at p.21:
"The simple answer in this case is that the Sale of Goods Act provides for silence on the point and here there is no silence, because there is a provision that the two parties are to agree."
28. He expanded on this at p.22:
"It is said that this case is to be treated on the same footing as if there had been no fixing of the price; as if the contract had been silent as to the price, and the law may then imply a reasonable price; but in the present case the facts preclude the application of any such principle. To do that would not be to imply something about which the parties have been silent; it would be to insert in the contract a stipulation contrary to that for which they have bargained to give them, not the result of their own agreement, but possibly the verdict of a jury, or some other means of ascertaining the stipulated price. To do that would be to contradict the express terms of the document which they have signed."
29. May & Butcher must be read in the light of a number of subsequent authorities in which the courts have found a contract to be enforceable, notwithstanding the absence of an agreement on price, even where the parties have expressly left the price to further agreement between them.
30. In Hillas & Co v Arcos Limited [1932] 147 LT 503, a contract for the supply of standard softwood goods "of fair specification" for the 1930 season contained an option of entering into a contract for the purchase of 100,000 items for the 1931 season. One issue was whether this was a mere agreement to agree. Lord Wright (at pp.504-505) described the contract as inartistic and "repellent to the trained sense of an equity draftsman", but said that it was clear that the parties "both intended to make a contract and thought they had done so". In such a case "[i]t is accordingly the duty of the court to construe such documents fairly and broadly, without being too astute or subtle in finding defects…" That did not mean, however, that the court:
"…is to make a contract for the parties, or to go outside the words they have used, except in so far as there are appropriate implications of law, as for instance, the implication of what is just and reasonable to be ascertained by the court as a matter of machinery where the contractual intention is clear but the contract is silent on some detail. Thus in contracts for future performance over a period, the parties may neither be able nor desire to specify many matters of detail, but leave them to be adjusted in the working out of the contract. Save for the legal implication I have mentioned, such contracts might well be incomplete or uncertain; with that implication in reserve they are neither incomplete nor uncertain. As obvious illustrations I may refer to such matters as prices or times of delivery in contracts for the sale of goods, or times for loading or discharging in a contract of sea carriage. Furthermore, even if the construction of the words used may be difficult, that is not a reason for holding them too ambiguous or uncertain to be enforced if the fair meaning of the parties can be extracted."
31. Lord Wright addressed May & Butcher v The King (at p.517), and the principle that a mere agreement to agree is no contract, as follows:
"No one would dispute such a rule, and its application to the instrument before the House in May and Butcher Limited v. The King has been finally determined in that case; but in my judgment the Court of Appeal were not justified in thinking that this House intended to lay down universal principles of construction or to negative the rule that it must be in each case a question of the true construction of the particular instrument. In my judgment, the parties here did intend to enter into, and did enter into, a complete and binding agreement, not dependent on any future agreement for its validity. But in any event the cases cited by the Court of Appeal do not, in my judgment, apply here, because this contract contains no such terms as were considered in those cases; it is not stipulated in the contract now in question that such matters as prices or times or quantities were to be agreed. I should certainly share the regret of the Lords Justices if I were compelled to think such important forward contracts as the present could have no legal effect, and were mere "gentlemen's agreements" or honourable obligations."
32. In Foley v Classique Coaches Limited [1934] KB 1, the parties had left the price of future petrol supplies "to be agreed … from time to time". That was, however, not fatal to the conclusion that there was a binding contract. Maugham LJ said, at p.13:
"[I]t is plain from the surrounding circumstances that the agreement as to the sale and purchase of the petrol was intended to be a binding contract and it formed part of the inducement for the sale of the land. Secondly, the agreement was duly stamped and bears all the signs of a legal contract, and was not, as in May & Butcher v The King, a mere informal letter."
33. The factors relied on in that case included that the contract had already operated in the past, was part of an overall transaction under which land had been conveyed, and contained an arbitration clause.
34. In G Scammell & Nephew Ltd v Ouston [1941] AC 251 (in which Foley v Classique Coaches was approved), Lord Maugham, having noted the general proposition that parties to a contract must express themselves so that their meaning could be determined with a reasonable degree of certainty, said at p.255:
"This general rule, however, applies somewhat differently in different cases. In commercial documents connected with dealings in a trade with which the parties are perfectly familiar the court is very willing, if satisfied that the parties thought that they made a binding contract, to imply terms and in particular terms as to the method of carrying out the contract which it would be impossible to supply in other kinds of contract."
35. The authorities were reviewed and summarised by Rix LJ (with whom Schiemann LJ and Sir Roger Waterhouse agreed) in Mamidoil-Jetoil Greek Petroleum Company SA v OKTA Crude Oil Refinery AD [2001] EWCA Civ 406; [2001] 2 Lloyds' Rep 76 ("Mamidoil").
36. Rix LJ (at §69) distilled 10 principles from the authorities (with sub-paragraph numbers added):
"i) Each case must be decided on its own facts and on the construction of its own agreement. Subject to that:
ii) Where no contract exists, the use of an expression such as "to be agreed" in relation to an essential term is likely to prevent any contract coming into existence, on the ground of uncertainty. This may be summed up by the principle that "you cannot agree to agree".
iii) Similarly, where no contract exists, the absence of agreement on essential terms of the agreement may prevent any contract coming into existence, again on the ground of uncertainty.
iv) However, particularly in commercial dealings between parties who are familiar with the trade in question, and particularly where the parties have acted in the belief that they had a binding contract, the Courts are willing to imply terms, where that is possible, to enable the contract to be carried out.
v) Where a contract has once come into existence, even the expression "to be agreed" in relation to future executory obligations is not necessarily fatal to its continued existence.
vi) Particularly in the case of contracts for future performance over a period, where the parties may desire or need to leave matters to be adjusted in the working out of their contract, the Courts will assist the parties to do so, so as to preserve rather than destroy bargains, on the basis that what can be made certain is itself certain…vii) This is particularly the case where one party has either already had the advantage of some performance which reflects the parties' agreement on a long term relationship, or has had to make an investment premised on that agreement.
viii) For these purposes, an express stipulation for a reasonable or fair measure or price will be a sufficient criterion for the courts to act on. But even in the absence of express language, the Courts are prepared to imply an obligation in terms of what is reasonable.
ix) Such implications are reflected but not exhausted by the statutory provision for the implication of a reasonable price now to be found in s. 8(2) of the Sale of Goods Act, 1979 (and, in the case of services, in s. 15(1) of the Supply of Goods and Services Act, 1982).
x) The presence of an arbitration clause may assist the Courts to hold a contract to be sufficiently certain or to be capable of being rendered so, presumably as indicating a commercial and contractual mechanism, which can be operated with the assistance of experts in the field, by which the parties, in the absence of agreement, may resolve their dispute."
37. The Court of Appeal returned to this topic the following year in BJ Aviation Ltd v Pool Aviation Ltd [2002] EWCA Civ 163 ("BJ Aviation"). In that case, an agreement for the operation of an airport contained a term entitling the operator to serve a notice requesting renewal for a further seven years "subject to the re-negotiation of the rent…". The Court of Appeal concluded that this was an unenforceable agreement, as re-negotiation of the rent was a condition precedent to the obligation to grant a fresh agreement. Chadwick LJ (with whom Schiemann LJ and Sir Murray Stuart-Smith agreed) distilled the following five propositions from the authorities:
"20. First, each case must be decided on its own facts and on the construction of the words used in the particular agreement. Decisions on other words, in other agreements, construed against the background of other facts, are not determinative and may not be of any real assistance.
21. Secondly, if on the true construction of the words which they have used in the circumstances in which they have used them, the parties must be taken to have intended to leave some essential matter, such as price or rent, to be agreed between them in the future— on the basis that either will remain free to agree or disagree about that matter— there is no bargain which the courts can enforce.
22. Thirdly, in such a case, there is no obligation on the parties to negotiate in good faith about the matter which remains to be agreed between them —see Walford v. Miles [1992] A.C. 128, at page 138G.
23. Fourthly, where the court is satisfied that the parties intended that their bargain should be enforceable, it will strive to give effect to that intention by construing the words which they have used in a way which does not leave the matter to be agreed in the future incapable of being determined in the absence of future agreement. In order to achieve that result the court may feel able to imply a term in the original bargain that the price or rent, or other matter to be agreed, shall be a "fair" price, or a "market" price, or a "reasonable" price; or by quantifying whatever matter it is that has to be agreed by some equivalent epithet. In a contract for sale of goods such a term may be implied by section 8 of the Sale of Goods Act 1979. But the court cannot imply a term which is inconsistent with what the parties have actually agreed. So if, on the true construction of the words which they have used, the court is driven to the conclusion that they must be taken to have intended that the matter should be left to their future agreement on the basis that either is to remain free to agree or disagree about that matter as his own perceived interest dictates there is no place for an implied term that, in the absence of agreement, the matter shall be determined by some objective criteria of fairness or reasonableness.
24. Fifthly, if the court concludes that the true intention of the parties was that the matter to be agreed in the future is capable of being determined, in the absence of future agreement, by some objective criteria of fairness or reasonableness, then the bargain does not fail because the parties have provided no machinery for such determination, or because the machinery which they have provided breaks down. In those circumstances the court will provide its own machinery for determining what needs to be determined —where appropriate by ordering an inquiry (see Sudbrook Trading Estate Ltd v. Eggleton [1983] A.C. 444)."'
[4] In KSY Juice Blends UK Ltd v Citrosuco GmbH [2025] EWCA Civ 760, Zacaroli LJ recorded, at paragraph 57:
'...the parties had agreed, or at least provided a mechanism for deciding, most elements of their long-term agreement. I have already addressed the overall price to be paid, the minimum quantity of Wesos to be supplied each year, and the duration of the agreement. Matters concerning delivery methods, quality of the product and timing of delivery and payment were agreed for all product to be supplied under the contract. The contract does not contemplate any renegotiation of any other part of the agreement. It does not, for example, contemplate either party renegotiating the overall volume to be supplied/purchased on the basis of that party's changing requirements.'
[5] In KSY Juice Blends UK Ltd v Citrosuco GmbH [2025] EWCA Civ 760, Zacaroli LJ recorded, at paragraph 23:
'It is common ground that there was a valid and enforceable agreement as to the supply of the (notional) amount of 400MT each year.'
[6] In KSY Juice Blends UK Ltd v Citrosuco GmbH [2025] EWCA Civ 760, Zacaroli LJ:
(a) recorded, at paragraph 15, the key clause (Clause 5) in the contract:
'Clause 5, headed "Delivery Period", provided as follows:
"1.200MT per each year
Deliveries to start January to December with the following split:
400mt fixed at 1.350euro/mt – invoicing price is 1600euro/mt Difference of price in free trucks
800mt at open price to be fixed latest by December of the previous year
Difference of price in free trucks"'
[bold added]
(b) said, at paragraphs 51 and 52:
'Nowhere is there any explicit statement that the price for 800MT was left to be agreed between the parties. Clause 5 stated merely that it was "open" and was "to be fixed" latest by December each year. On its face, that says nothing about how the price was to be fixed.
Nevertheless, I accept ... that the contract implicitly envisages that - at least in the first instance the parties would seek to fix the price by agreement...'