In KSY Juice Blends UK Limited v Citrosuco GMBH [2025] EWCA Civ 760, the Court of Appeal implied a reasonable or market price for an additional quantity of orange juice pulp wash (also known as water extracted soluble orange solids/Wesos) where an open price to be fixed later had been set out in a contract. Wesos is a product of the juice extraction process that is used to create orange drinks.
Usually, failure to agree a price can render a contract or part of a contract unenforceable, and as the price had been left open, Citrosuco argued there was only an agreement to agree. Nothing more. But taking account of all the circumstances of the case, including an intention to deal in both the original quantity and an additional quantity of Wesos for the duration of a three-year contract, prior commercial dealings on similar terms that had been performed without any issues, and the fact that there was a fair way to determine a reasonable or market price, the Court of Appeal inserted an implied term in order to give business efficacy to the contract.
Background
In May 2018, KSY agreed to supply Wesos to Citrosuco for a period of three years commencing on 1 January 2019. 400 metric tonnes (MT) at a fixed price and 800 MT at an “open price to be fixed latest by December of the previous year.”
Later that year, Citrosuco’s need for such pulp wash had reduced, and no price was agreed for the 800 MT for any of the years of the contract. Citrosuco paid for 400 MT in 2019 but declined to take delivery of anymore. In 2020, KSY delivered 126 MT, but Citrosuco only paid for 84 MT, and in September 2020 KSY terminated the contract, alleging that Citrosuco was in repudiatory breach. It sought the contract price or damages for breach of contract.
Prior to this 2018 contract, the parties had entered into two previous contracts in 2017 where the price was to be agreed by a specified date– an arrangement that reflected the volatility of the market, allowed for flexibility and had been honoured by both parties.
High Court
Citrosuco argued that as the price for the additional 800 MTof Wesos had not been agreed, this part of the contract was unenforceable for being a mere agreement to agree. In August 2024, a judge in the High Court agreed. The judge also refused to imply a market or reasonable price undersection 8(2) of the Sale of Goods Act 1979 based on difficulties in defining what that should be - a market price for pulp wash was not readily identifiable.
Court of Appeal
Whilst accepting that contracts lacking agreed pricing term scan be unenforceable, the Court of Appeal approached this case on the basis that, wherever possible, commercial contracts should be interpreted in a way that preserves enforceability.
They therefore reviewed the contract, the intentions of the parties (the parties did intend to deal in the full amount of 1,200 MT of Wesos each year for three years), the contract was clear on other key elements(duration, minimum volumes of Wesos to be supplied, delivery and payment), and previous commercial contracts on similar terms had been performed with no issues. They were also satisfied that there was objective market data available to determinea reasonable or market price (Wesos trades at around 70% of the price of frozen concentrated orange juice). All of which combined led to a ruling that the open pricing clause should be enforced and a reasonable or market price implied.
Takeaways
Where possible, courts will uphold a commercial agreement if there is evidence that the parties intended to be bound by it.
Based on the facts in this case, the bargain was upheld, but that might not be the outcome in other cases. The principle of being merely an agreement to agree still stands, and this case is a reminder that in long-term open pricing contracts, where flexibility and market volatility are important considerations, contracts should reflect the actual wishes of each party in all commercial eventualities in order to avoid uncertainty and costly court action that, in this case, resulted in the court implying a reasonable or market price.
KSY Juice Blends UK Ltd v Citrosuco GMBH [2025] EWCA Civ760
