From “Open Price” to “Market Price”:
KSY Juice Blends UK Ltd v Citrosuco GmbH ([2025] EWCA Civ 760)

Introduction

The Court of Appeal’s decision in KSY Juice Blends UK Ltd v Citrosuco GmbH tackles a classic commercial-law puzzle: what happens when the parties expressly leave price “to be fixed” in the future and then fail to agree? The judgment clarifies that—contrary to the literal reading of May & Butcher v The King—the court may still imply a term requiring payment of a reasonable or market price where objective benchmarks exist, and that s 8(2) of the Sale of Goods Act 1979 (“SGA 1979”) does not obstruct such implication.

The dispute arose from a three-year supply contract for orange-juice by-product (Wesos). Citrosuco accepted the first 400 MT each year—whose price was pre-agreed—but repudiated the balance (800 MT per year) on the ground that price was “open” and never finalised. KSY sued; the High Court sided largely with Citrosuco; the Court of Appeal has now overturned that ruling.

Summary of the Judgment

• The Court (Zacaroli LJ, Popplewell LJ, Baker LJ) held there is an implied term that, failing agreement, the 800 MT per year are to be supplied at a reasonable/market price.
• The presence of an “open price to be fixed” clause did not exclude implication; s 8(2) SGA 1979 is a safety-net, not a barrier.
• There existed an objective benchmark—Wesos tracking c. 70 % of the FCOJ market price—sufficiently certain for the court to determine price.
• The contract therefore remained enforceable for the whole 1,200 MT per year. Appeal allowed; matter remitted for quantum assessment on the implied-price basis.

Analysis

1. Precedents Cited and Their Influence

Key authorities discussed

• May & Butcher v The King (1934): iconic “no price, no contract” dictum. Cited by Citrosuco as controlling.
• Hillas & Co v Arcos (1932); Foley v Classique Coaches (1934); G Scammell v Ouston (1941): lineage of cases where courts salvaged contracts by implying “reasonable” criteria.
• Mamidoil-Jetoil v OKTA (2001) and BJ Aviation v Pool Aviation (2002): Court of Appeal frameworks for analysing “agreements to agree”.
• Morris v Swanton Care (2018): illustration of when implication fails due to indefiniteness.

The Court synthesised these authorities into a pragmatic approach: the starting point is parties’ intention to be bound; implication is permissible where (i) the contract is otherwise complete, and (ii) objective criteria exist to assess price. Importantly, the Court avoided treating the rigid language of May & Butcher as an absolute bar, emphasising Lord Wright’s warning that each document must be construed in its own commercial context.

2. Legal Reasoning

1. True construction of the clause: The words “800 MT at open price to be fixed” suggest negotiation, but do not expressly make mutual consent a condition precedent.
2. Implied term analysis (Mamidoil principles):
   – Parties objectively intended a binding three-year, 3,600 MT supply relationship;
   – Most variables (volume, delivery, invoicing mechanics) were set;
   – Market volatility justified flexibility, yet parties expected certainty if talks failed.
   Therefore, the “business efficacy” and “obviousness” tests (per M&S v BNP Paribas) favoured implication.
3. Interaction with s 8(2) SGA 1979: Zacaroli LJ held that the statute does not oust common-law implication; it co-exists as a fallback where no contractual mechanism (express or implied) exists. Were a reasonable-price term implied, s 8(2) becomes superfluous but not contradictory.
4. Objective benchmark: Uncontested expert evidence showed Wesos consistently priced at ≈ 70 % of FCOJ. This provided the requisite certainty. Ancillary cost variables (Brix adjustments, packing, duty) were readily ascertainable.
5. Policy choice—preserve not destroy bargains: Following Lord Wright and Rix LJ, the Court prioritised commercial expectation and certainty over formalist rigidity.

3. Impact of the Decision

• Narrowing the reach of “agreements to agree” invalidity: Parties can safely include “price to be fixed” language where there is an identifiable market proxy.
• S8(2) SGA 1979 reframed: The section is confirmed as non-exclusive; courts may reach the same result via common-law implication even where parties envisage negotiation.
• Encouragement of objective benchmarks: Drafting long-term supply contracts may now lean towards referencing indices/percentages rather than chasing exhaustive price schedules.
• Litigation strategy: Defendants resisting performance on “open price” grounds face an uphill battle if any trade-recognised yardstick exists.
• Broader than goods: Though rooted in sale-of-goods, the reasoning will likely influence service, joint-venture and earn-out agreements.

Complex Concepts Simplified

• Brix: A sugar-solids measurement. Higher Brix = sweeter, denser liquid. Contracts often peg price to a standard Brix, then adjust up/down per actual content.
• Free Trucks Mechanism: Commercial jargon for “bonus deliveries”. If the true (market) price falls below the invoiced headline price, the seller supplies extra volume free of charge to neutralise the difference.
• Agreement to Agree: A clause where an essential term (here, price) is left for future mutual consent. Traditionally unenforceable if the parties remain free to disagree.
• Implied Term of Reasonable Price: A rule allowing the court to fill the gap by ordering payment at a fair market rate, provided such rate is objectively ascertainable.
• Section 8(2) SGA 1979: Statutory default that, absent contractual price determination, the buyer must pay a “reasonable price.” Now confirmed not to bar parallel common-law implication.

Conclusion

KSY Juice Blends v Citrosuco signals a pragmatic shift: even an express “open price to be fixed” clause will not sink a bargain where commercial reality supplies a workable yardstick. The Court reaffirmed its willingness to rescue, not wreck, serious commercial arrangements, bridging the gap between doctrinal certainty and market practice. Contract drafters should, however, take heed: clarity still reigns supreme—but where inevitable uncertainty exists, anchoring price to transparent market data can ensure enforceability.

Practitioners litigating “agreements to agree” must now marshal evidence of objective pricing proxies; conversely, parties determined to retain a veto over future price must make that intention unmistakably clear.