Is a long-term commercial contract enforceable where the price for the majority of the goods is left “to be fixed” by the parties? In KSY Juice Blends UK Ltd v Citrosuco GMBH [2025] EWCA Civ 760, the Court of Appeal considered the boundary between a open-price contract and an “agreement to agree.”
The contract specified a fixed price for 400 metric tonnes (MT) of product per year. However, for an additional 800 MT per year, the contract stated the price was “to be fixed” periodically. When the market price for the product dropped, the Buyer stopped taking delivery of the additional 800 MT. They argued that because the price was never agreed upon, that portion of the contract was a mere “agreement to agree” and therefore legally unenforceable.
The Court of Appeal (Zacaroli LJ, with whom Popplewell and Baker LJJ agreed) held the contract enforceable in its entirety.
“To be Fixed”: Machinery v. Condition Precedent
The Court’s analysis turned on the distinction between a condition of formation and the machinery of performance. Zacaroli LJ correctly rejected the High Court’s conflation of “to be fixed” with “to be agreed.” The phrase “to be agreed” explicitly requires the future consensus of the parties, attracting the strictures of May & Butcher. By contrast, “to be fixed” describes an outcome - that a price will be established - without prescribing a specific method (i.e. mutual agreement).
This distinction is sound. Where, as here, the parties have acted upon a long-term relationship and the intention to be bound is manifest, the silence as to the method of fixing the price is not fatal. It creates a gap which the law can fill, in line with Hillas and Mamidoil.
The High Court’s rigid application of May & Butcher ignored the distinction between the negotiation phase and the performance phase. The parties were not negotiating; they were performing a signed deal. To permit a party to treat a “price to be fixed” clause as an option to withdraw whenever the market moves against them would be to sanction a breach of contract under the guise of uncertainty.
Commercial Efficacy
The judgment affirms the robust approach of the English courts to commercial certainty. As Zacaroli LJ observed, the “to be fixed” clause was merely the mechanism for adjusting the consideration for an existing obligation. By invoking the “reasonable price” mechanism, the Court gave effect to the parties’ objective intention to trade, privileging commercial substance over the technical gaps.
