Agreeing to sell goods or services over an extended period can be difficult. What happens if the cost of the goods changes over that time ? What if the exchange rates change ? There are so many variable.

As a result buyer and seller can agree to put off agreeing a price. But that can bring its own difficulties as was illustrated in the recent case KSY Juice Blends UK Ltd v Citrusco Gmbh [2025] EWCA Civ 760 (19 June 2025).

What happened

The seller agreed to sell orange juice pulp over a 3 year period. A quantity of 1274 tonnes per annum was agreed with the invoicing price for 474 tonnes of these being €1350/tonne. For the remaining 800 tonnes the contract stated merely “800 mt at open price to be fixed latest by December of the previous year”.

No price for the 800 tonnes was ever fixed by the parties. The buyer took delivery of 400 tonnes for year 1, and 127 tonnes for year 2. Disagreements led to the seller terminating the contract meaning that none was delivered in year 3. The seller sued for damages resulting from the buyer’s refusal to take full delivery. The buyer’s defence was that agreement on the price of for the 800 tonnes was essential for the buyer to be legally obliged to take that element and as none had been agreed, they could not be obliged to take the 800 tonnes.

The seller’s response was that (1) it was an implied term at common law that if agreement couldn’t be reached the buyer would pay a reasonable or market price, or in any event (2) section 8(2) of the Sale of Goods Act 1979 provided that if the price had not been fixed or determined by the parties’ course of dealing, the buyer was obliged to pay a reasonable price.

The outcome

The English/Welsh Court of Appeal found that there was an implied term at common law of a reasonable or market price if the parties couldn’t agree. It reasoned that once parties have begun to act upon a contract courts should seek to preserve rather than destroy agreed obligations. Here it was agreed that 1274 tonnes would be taken by the buyers. Part of the price for that quantity had been agreed. There was a measure in the marketplace by which a reasonable price could be ascertained. Therefore the implied term of a reasonable price in the absence of the anticipated agreement was present. The buyer’s defence was rejected.

Thoughts

 The court’s reasoning applies to agreements other than for sale of goods – the court didn’t rely on the section 8(2) argument but instead on the common law of implied terms. The court ‘s approach was practical: the contract had been acted on, parties had agreed on the amount to be delivered and so it was reasonable to fill in the price gap.

But it’s odd – and unfortunate – that the court didn’t reference the common law test for implying terms into a contract as discussed in the 2015 UK Supreme Court Marks and Spencer v BNP Paribas Securities.

If the test in Marks and Spencer had been applied, then one wonders whether one of the criteria for implication: that at the time the contract was entered into the term was “so obvious” to a bystander that they would have been seen it as applicable without expression, would have been satisfied. After all if they’d wanted to fix a market price they they could have said so.

Lessons for advisers

 If anything the case serves as a warning: if the parties can’t agree a price or a mechanism for fixing it – and instead “kick the can down the road”, there is a risk that the court could imply a market price, just as if the contract said nothing about the price at all.

So “agree to agree” is, as ever, a risky move.