KSY Juice Blends v Citrosuco: The Juice was worth the Squeeze
JMW examines the legal consequences of open pricing and contractual certainty
In KSY Juice Blends UK Ltd v Citrosuco GMBH [2025] EWCA Civ 760, the Court of Appeal has provided valuable guidance on the enforceability of commercial agreements containing open pricing terms, reaffirming the courts’ willingness to uphold business arrangements where there is clear intention to be bound.
The facts
On 18 May 2018, KSY and Citrosuco entered into a three-year supply agreement for orange juice pulp wash (“Wesos”). The parties had agreed a price for the yearly supply of 400 metric tonnes (MT) annually however, a further 800MT per year was to be supplied at an “open price to be fixed”.
In late 2018, Citrosuco began to refuse deliveries due to reduced demand. In September 2020, KSY terminated the agreement on the basis Citrosuco was in repudiatory breach and issued a claim for the contract price, or in the alternative, damages for breach of contract.
The dispute
There was no dispute that the fixed-price portion (400MT) was enforceable. The issue concerned the additional 800MT: was the open pricing arrangement merely an unenforceable “agreement to agree”? The Judge at first instance held the contract to be unenforceable in so far as the 800MT was concerned as it was a mere agreement to agree as there was no mechanism to determine the price. He also held that the rule under Section 8(2) of the Sale of Goods Act 1979, that lets a reasonable price be used when no price is agreed, did not apply because the contract required further agreement.
The Appeal
KSY appealed on the basis that on a true construction of the contract, or by way of an implied term, in the absence of agreement on price, a reasonable or a market price was to be paid in relation to the 800MT. Permission to appeal was granted and the appeal was heard on 15 May 2025.
The Court of Appeal agreed with KSY. It reviewed the contract and focused on the parties’ intentions and the feasibility of implying pricing terms. It held that the contract envisaged the sale of the additional 800MT and an implied term as to the price for the 800MT of Wesos at a reasonable or market price would be appropriate particularly given the commercial context and the existence of a suitable benchmark. The Court of Appeal also confirmed that Section 8(2) of the Sale of Goods Act 1979 could apply as the parties intended to be bound.
Takeaways
This judgment reinforces the longstanding principle that, wherever possible, the court will strive to uphold commercial agreements, particularly where there is evidence of clear intentions to be bound by the contract. The judgment should also assist those in long-term complex commercial agreements to provide more flexible pricing mechanisms for goods which are subject to market forces and fluctuations.