Recently, in the case of KSY Juice Blends UK Ltd v Citrosuco GmbH [2025] EWCA Civ 760, the Court of Appeal considered contractual certainty and implied pricing terms for water-extracted soluble orange solids ("wesos").
Spoiler alert - it reversed an earlier High Court ruling and unanimously held that the parties' 2018 supply agreement for wesos was enforceable in full, even though the price for two-thirds of the annual volume had been left "open" to be "fixed" in the future.
Background
KSY and Citrosuco entered into an agreement under which KSY supplied wesos to Citrosuco. One third had a fixed price and the rest was "to be fixed". Citrosuco later argued that the open-price portion was void for uncertainty. The High Court agreed, treating the words "to be fixed" as an unenforceable agreement to agree. KSY appealed.
Decision of the Court of Appeal
It held that:
- The parties unmistakably intended to enter a binding three-year bargain covering the entire volume of wesos. The contract specified duration, minimum deliveries and an invoicing methodology; price uncertainty affected only the mechanism for converting the outstanding invoice value into tonnage.
- The agreement contemplated that the parties would first seek agreement on price, but if no agreement was reached, the contract did not lapse. The Court said it should "strive to uphold rather than destroy" the bargain by implying an objective standard.
- There existed an objectively workable benchmark: expert evidence established that wesos consistently traded at around 70% of the transparent market price for frozen concentrated orange juice. That relationship provided the "reasonable price" yardstick required under section 8(2) SGA.
- The High Court had overstated the alleged vagueness caused by peripheral factors such as packaging, transport and shelf-life. Those matters were expressly regulated elsewhere in the contract and did not create an obstacle to coming up with a price.
The Court therefore implied a term that it could determine the price. Citrosuco was consequently liable for damages for non-performance.
Practical implications
When you have a volatile market, and prices vary a lot, it can be tricky to balance flexibility with enforceability when drafting contracts, but it's advisable to clearly outline the pricing structure in the contract to avoid any ambiguity. Going to court is expensive, and it is much better to have principles set out in the contract that you can use to decide the price.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
