Contracts Matter

September 2025

Welcome to the autumn edition of our contract law update series. In this update, we provide a round-up of some of the most significant contract law cases since our spring update to help our clients stay up to date, when drafting and negotiating contracts.

Date published

18 September 2025

Implied terms

Contractual certainty - open-pricing in long-term supply contracts

KSY Juice Blends UK Ltd v Citrosuco GmbH [2025]‍

The Court of Appeal found that a supply agreement which left an element of pricing open was enforceable in its entirety, by implying a term for payment of a reasonable or market price in the absence of express agreement.

Facts

In this case, a dispute arose during a three-year contract for the supply of water-extracted soluble orange solids by KSY Juice Blends UK Ltd to Citrosuco GmbH.

The contract provided for a fixed price for the yearly supply of 400 metric tonnes of the product, however, the remaining 800 metric tonnes per year were to be supplied “at open price to be fixed latest by December of the previous year” (which Citrosuco later contended was “a mere agreement to agree”, and therefore unenforceable). When market conditions changed, Citrosuco declined to take delivery of any product beyond the quantities for which the price had been fixed. KSY consequently terminated the contract for repudiatory breach, claiming damages.

The High Court in the first instance accepted Citrosuco’s argument that the contract was unenforceable in respect of the 800 metric tonnes, as the contract lacked sufficient certainty as to the pricing mechanism to fix the price in the absence of the parties’ agreement. KSY appealed.

Decision

The issues on appeal were:

Whether or not a term should be implied that a reasonable or market price should apply where the parties intended to enter a binding contract (and whether such implication is precluded by the Sale of Goods Act 1979; and
Whether a reasonable or market price could be calculated.

The Court of Appeal found that the contract clearly represented a commercial arrangement, by which the parties intended to be bound for the entirety of the metric tonnes provided for within it, as evidenced by the explicit agreement of part of the price (in spite of the remaining price being left open). For the volume left open, the Court of Appeal found that an implied term to pay a reasonable or market sum avoided unenforceability. The court also clarified that section 8(2) of the 1979 Act – which states that if the price is not determined by a contract, the buyer must pay a “reasonable price” – did not preclude implying a similar term at common law.

In respect of calculating the reasonable or market sum – whilst it was recognised that there is no sufficiently transparent market price for the products specifically, the Court of Appeal accepted evidence that the product price tracked at around 70% of the price of Frozen Concentrated Orange Juice (which is widely reported), and the court therefore deemed this to be a reasonable price for the products.

Key takeaways

If a contract indicates a binding agreement, but lacks a fixed price mechanism, courts may fill that gap by implication – this shows the courts’ willingness to uphold commercial contracts, even where certain details are omitted at the outset.
References to the price of established products can provide sufficient benchmarking for calculating the reasonable price of others – this is notable for those party to commercial arrangements looking to agree pricing mechanisms for goods which are subject to the forces of the market.

Contract formation

Casual chat creates binding contract

Jaevee Homes Ltd v Fincham (t/a Fincham Demolition) [2025].

‍An exchange of a series of WhatsApp messages between a developer and contractor was held to constitute a valid contract.

This case highlights the dangers of informal discussion of commercial terms over mediums such as WhatsApp.

Facts

The claimant, Jaevee Homes Ltd, engaged the defendant, Steve Fincham (trading as Fincham Demolition), to carry out demolition works at a site Jaevee was developing in Norwich. Following a site visit by Fincham, the parties exchanged a series of emails discussing the scope, duration and pricing of the demolition works. Fincham provided Jaevee’s CEO, Ben James, with a written quotation for its services, however no agreement between the parties was reached. A few days later, this discussion continued over WhatsApp, following Jaevee’s request for a revised quotation for the works at a reduced price. The parties then exchanged messages as follows:

“[17/05/2023, 16:34:43] Steve Fincham: Hi Ben How did you get on mate is the job mine mate

[17/05/2023, 16:38:32] Ben James: Can you start on Monday?

[17/05/2023, 16:55:06] Steve Fincham: I can start with getting the scaffolding sorted and stuff on Monday mate but men will start the following Monday […] Appreciate this work I really do Ben

[17/05/2023, 17:43:15] Steve Fincham: Ben Are we saying it's my job mate so I can start getting organised mate

[17/05/2023, 20:06:42] Ben James: Yes

[17/05/2023, 20:06:51] Ben James: Monthly applications [for payment by invoice]

[17/05/2023, 20:11:50] Steve Fincham: Are you saying every 28 or 30 days from invoice that's a yes not on draw downs then good call you at 8.30 mate Thanks mate appreciated Ben

[17/05/2023, 20:12:12] Ben James: Ok”

Jaevee later emailed a purchase order and its standard form of sub-contract to Fincham on 26 May 2023 (which, notably, set out a different procedure for payment applications and when they fell due to be paid), however Fincham neither acknowledged nor replied to this email.

Fincham commenced work on the site and, believing it was entitled to do so following the exchange between the parties on WhatsApp, proceeded to issue four invoices within a three-month period, which were paid in part by Jaevee. A dispute arose regarding the work carried out by Fincham and the amounts payable by Jaevee, and Jaevee purported to terminate the contract.

Jaevee argued that the exchange between the parties on WhatsApp simply constituted informal discussions, not contractual terms, and the terms attached to its email of 26 May 2023 applied (i.e. the “last shot” doctrine). As such, it should only be obliged to pay what it considered was validly due under its standard terms of subcontract. Fincham contended that the contract terms were as set out in the exchange of WhatsApp messages between the parties on 17 May 2023.

Decision

The court agreed with Fincham, and held that the exchange of emails and WhatsApp messages between the parties "whilst informal, evidenced and constituted a concluded contract”. Despite the medium in which they were communicated, it was deemed that all the terms required to form a construction contract were in fact present.

In response to Jaevee’s submissions that no contract had been formed during the course of these exchanges as no agreement had been reached between the parties as to terms such as the duration of the works, payment terms and a start date, it was held that, respectively:

Duration of works is not an essential element of a construction contract, and, in the absence of express agreement, there is an implied term that the contractor will complete within a reasonable period;
As stated within the WhatsApp exchange, it was agreed that works would commence on “the following Monday”, however, in any event, agreement as to a precise start date was not an essential term of the contract; and
The absence or deficiency of agreed payment terms is not contrary to the existence of a concluded contract, and the Housing Grants, Construction and Regeneration Act 1996 served to fill the gap in the event a contract did not contain appropriate payment terms. However, in this instance, the agreed payment terms were held to be 30 days from invoice at the latest, as set out in Fincham’s message of 17 May 2023.

The court was of the opinion that the facts indicated that the parties had intended to reach agreement on 17 May 2023. There was no suggestion that the final terms depended on agreement as to any other matter, such as the incorporation of Jaevee’s standard terms of contract. The exchanges evidenced the parties had reached agreement in respect of scope, the start date for the works, the contract price, and payment terms, and a contract was concluded on that basis. Jaevee’s subsequent attempt to incorporate its subcontract terms was unsuccessful, as these were not accepted by Fincham.

Key takeaways

Informal exchanges may constitute binding agreements if they satisfy the requirements for valid contract formation (that is, offer, acceptance, consideration and intention to create legal relations). Although it is feasible that the court may have reached a different conclusion if the agreement in question related to a sector in which it was not possible to imply any statutory terms in order to bridge any gaps, a court would, in any event, be empowered to imply terms by operation of common law or statute to give effect to the parties’ agreement, if deemed appropriate.
The facts of this case serve as a reminder to exercise caution when discussing commercial terms on an informal basis over mediums such as WhatsApp, or via email. Parties should be alive to the risk and consequences of forming a legally binding contract without intending to do so, or in a manner that is not necessarily reflective of their understanding.

From chat to contract: digital age deal-making

DAZN Ltd v Coupang Corp [2025]‍

In this case, the Court of Appeal held that a binding contract had been formed by parties negotiating through informal digital communications.

Facts

The dispute centred on the FIFA Club World Cup 2025, involving 32 of the world's best football clubs competing in June and July 2025. FIFA owned the broadcasting rights exclusively and licensed them to DAZN, which was authorised to sublicense in different territories subject to FIFA's conditions. Coupang, a market-leading e-commerce platform in South Korea, sought broadcasting rights for its streaming service Coupang Play through its subscription platform Coupang WOW.

The negotiations were conducted by John Lee (Head of Sports for Coupang Play) and Danny Kim (member of sports business team at Coupang) for Coupang, and Andrea Radrizzani (director of DAZN's ultimate parent company) and Charles Ma (Head of Media Rights for Asia-Pacific region at DAZN) for DAZN. Communications between the parties were primarily by WhatsApp and email, though WhatsApp records were incomplete as they often showed "null" entries indicating voice calls whose content was not captured.

On 27 February 2025, Mr Lee communicated Coupang's offer of US$1.7 million to Mr Radrizzani in a voice call, followed by a formal email proposal from Danny Kim detailing: "Competition: FIFA Club World Cup 2025 -Rights: Live Broadcast rights and VOD rights -Territory: South Korea -Exclusivity: Co-exclusive with DAZN -Financial consideration: USD 1,700,000."

On 3 March 2025, Radrizzani confirmed to Lee: "deal is confirmed ... I will follow up with Charles to coordinate the draft agreement," followed by Charles Ma's formal acceptance email stating "I am pleased to inform you that we will accept Coupang Play's offer for the FIFA Club World Cup 2025".

Subsequently DAZN received a higher offer from a competitor and asserted that it was entitled to accept this as it had only reached a non-binding agreement in principle with Coupang. Coupang disagreed, asserting that a binding contract had been concluded and brought a claim in the Commercial Court.

Following an expedited trial, Judge Pelling KC held that a contract had been concluded by emails sent on 27 February 2025 and 3 March 2025, set against the background of WhatsApp messages and conversations, and that Coupang was entitled to specific performance. DAZN appealed.

Decision

The appeal was dismissed in its entirety, the Court of Appeal holding that "the parties had reached an agreement by which they intended to be immediately and legally bound by the exchange of the emails in question."

The court rejected DAZN's argument that the 27 February email lacked the necessary quality of an offer, finding that despite imperfect English from the Korean sender, "its sense in context is clearly conveying a formal contractual offer". On the acceptance issue, the court found that DAZN's acceptance was unequivocal, noting "The language which preceded those words, in which DAZN said 'we will accept Coupang Play's offer' is entirely unequivocal." Regarding intention to create legal relations, the court found this existed and that initially the parties’ language and behaviour was consistent with their being bound by the agreement.

Key takeaways

As referenced in the judgment, from previous caselaw:

‍“it is well established that the whole course of the parties’ negotiations must be considered; that it is possible for parties to conclude a binding contract even though it is understood or agreed that a formal document will follow which may include terms which have not yet been agreed; that whether this is what the parties intend to do must be determined by an objective appraisal of their words and conduct; and that the burden lies on the party asserting that such a contract has been concluded to establish that it has.”‍
This case demonstrates the application of those principles to modern commercial negotiations conducted through informal digital platforms like WhatsApp and email and how these can create binding legal obligations, even when parties anticipate executing formal contracts later. The Court of Appeal ultimately concluded that the parties had reached an agreement by which they intended to be immediately and legally bound by the exchange of the emails, establishing an important precedent for contract formation in the digital age.

Good faith

Good faith gone bad

Matière SAS v ABM Precast Solutions Ltd [2025]‍

The Technology and Construction Court found the claimant, Matière SAS, to be in breach of its express obligations of good faith in a consortium agreement. However it concluded that such breach did not amount to loss of chance on the part of the joint bidder, on the basis that the bid would have been rejected in any event.

This case provides some useful commentary on the application of express good faith obligations and loss of chance claims.

Facts

Matière SAS, a designer, fabricator and installer of civil engineering structures, and ABM Precast Solutions Ltd, an engineering company specialising in the manufacture and installation of pre-cast reinforced concrete products, agreed to enter a joint bid for a major subcontract under the HS2 'Green Tunnels Project', comprising the manufacture, supply and installation of three 'cut and cover' tunnels along the HS2 route. Matière would be responsible for the design of the tunnels and would co-ordinate their installation, while ABM was to be responsible for the manufacture of the tunnels themselves.

To govern their joint bid, the parties entered into a consortium agreement in January 2019, a Professional Services Contract (PSC) with the main contractor (under which the parties were jointly appointed as “the Consultant”), and a further collaboration agreement in June 2020. The consortium agreement contained the following express obligation of good faith on the parties, and the collaboration agreement also contained a similar provision:

“ABM and Matière shall co-operate and collaborate with one another in accordance with the terms of this Agreement and in the course of their performance of their obligations pursuant to any associated PSC each of ABM and Matière shall act in good faith toward the other and use reasonable endeavours to forward the interests of the co-operative enterprise."

The main contractor had several concerns regarding the proposed approach to the works (including operational and cost concerns arising from ABM’s proposal to build a dedicated factory in Scunthorpe to manufacture the pre-cast concrete), and the joint bid subsequently failed. The main contractor later contracted directly with Matière for the installation of the tunnels and awarded the manufacturing works to another contractor.

Matière claimed £373,295.06 for sums due under the consortium agreement, which provided that ABM would be responsible for invoicing the main contractor for services performed by Matière under the PSC, and passing these sums on to Matière.

ABM subsequently issued a counterclaim for £19 million in lost profits, alleging that Matière was in breach of its good faith obligations by seeking to undermine the joint bid. It asserted that Matière had engaged in discussions with the main contractor regarding the factory proposals without ABM’s knowledge, given a presentation regarding the Green Tunnels Project to a key competitor of ABM, and breached the terms of the collaboration agreement by entering into subsequent contracts with the main contractor. As a result of such alleged breaches, ABM considered that the consortium’s chances of winning the bid were no longer “virtually certain” but "nil or virtually nil".

Decision

The court found that Matière had breached its good faith obligations under both the consortium agreement and the collaboration agreement. Reflecting on the principles set out in Yam Seng Pte Ltd v International Trade Corporation Ltd, it considered the core meaning of an express duty of good faith is to “act honestly”, however noted that this also extends to not engaging in conduct which would be regarded as commercially unacceptable to reasonable and honest people. It also considered that the content of the duty is heavily conditioned by its context, which might include “fidelity to a bargain” or “adherence to the spirit of the agreement” (applying Re Compound Photonics Group Ltd).

Applying these principles, the court found that Matière had breached these obligations. By engaging with the main contractor independently regarding ABM’s factory plans and possible alternatives, which would, by implication, reduce ABM’s scope or result in them being replaced entirely, Matière's conduct was either dishonest or was of a type that would be regarded as commercially unacceptable to reasonable and honest people. It did not “keep fidelity to the bargain it made with ABM” and its actions “had the potential to render that bargain worthless or significantly less valuable”.

Despite its findings of breach, the court dismissed ABM's counterclaim, concluding that ABM had failed to establish that any of Matière's breaches played a material part in reducing ABM's prospects of appointment, whether individually or in aggregate. Although the court accepted ABM’s contention that the joint bid had a real and substantial chance of success at the outset of the relationship, which later diminished, it considered that such breaches were immaterial for causation purposes on the basis that any actions by Matière to undermine the Scunthorpe factory were in response to or at the behest of the main contractor, and with its encouragement. It concluded that the main contractor would ultimately have conducted its own equivalent investigations into alternative sites and contractors, irrespective of Matière’s actions.

The court also noted that there were other independent factors which had occurred over time that had impacted ABM/Matière's prospects of success (including concerns regarding ABM’s technical and operational ability, as highlighted in the termination letter), and that the fact that ABM was never in a position to fund the construction of the factory, despite that having been the basis of their final offer. As such, the court was satisfied that the bid was unlikely to be successful in any event, even if Matière had adhered to its obligations.

Key takeaways

The principles of this case are of wider application, serving as a useful reminder that, when drafting agreements, parties should carefully consider the scope and application of good faith clauses, ensuring they understand their obligations and any potential exposure they generate. It also highlights that any such obligation will be interpreted in the relevant context in which it appears.
This case also serves to demonstrate that establishing causation in loss of chance claims remains a significant evidential hurdle. Despite a finding of clear breaches of good faith in this case, ABM was unable to demonstrate that these breaches actually caused their loss. Claimants must be able to establish clear causation, which can be particularly challenging in complex commercial relationships where multiple external factors can influence outcomes.
The arrangements between the parties in respect of the joint venture were also relatively informal. Each party was to be responsible and account for their own costs and profits, and the contracts did not contain clear risk allocation mechanisms (including liability for losses), as would be expected of an agreement of this nature, highlighting the need for a clear understanding between parties of their respective positions when entering into a joint venture arrangement, and ensuring this is defined in sufficiently robust and clear contractual documentation.

Franchisor's conduct breaches duty of good faith and fair dealing

The High Court found former franchisee’s franchise agreements contained implied terms of good faith and fair dealing. As such, the court released the franchisees from their franchise agreements, condemning the franchisor’s ‘intimidatory conduct’ and ‘aggressive’ business practices.

The case was fact specific and involved detailed specific findings, but it shows how the courts are willing to examine franchise agreements and intervene where fairness demands it.

Facts

This case concerned a dispute between John Benson Limited, a driving school operating as Benson School of Motoring, and twenty former franchisees who were driving instructors. The franchisees were individuals with limited academic qualifications and no prior experience as driving instructors or of trading on their own account.

Each claimant had entered into a franchise agreement with John Benson and in late 2020, terminated their franchise agreements, alleging John Benson breached implied terms of good faith and fair dealing. The claimants:

Were obliged to devote substantially the whole of their time to the franchise;
Could not carry out any other business activities without John Benson’s consent;
Had obligations to act in John Benson's best interests;
Did not control their own customer base;
Could not delegate or subcontract performance; and
Until January 2020, were required to charge only tuition fees prescribed by John Benson.

Central to the case were serious allegations about Mr Benson’s behaviour, both in person and on Facebook. The central legal question was whether the franchise agreements contained implied obligations of good faith.

John Benson denied that the franchise agreements contained such implied terms arguing that the franchise agreements are usual commercial contracts and denied breaches, asserting that the claimants' terminations were repudiatory breaches giving rise to counterclaims for damages that would be payable had the franchise agreements continued until their expiry.

Decision

The High Court found that:

although franchise agreements do not normally carry an implied duty of good faith, the relationship between John Benson and the claimants was closer to an employer-employee relationship with onerous standard terms being imposed on each franchisee and a high level of control by John Benson.
This imbalance justified implying – in fact, though not in law, good faith obligations on John Benson.
John Benson had breached these terms entitling the claimants to terminate their respective agreements.
The claimants' franchise agreements were lawfully terminated, and they were no longer bound by any terms of their respective agreements

The judge stressed that his findings were based on the “peculiar” facts of this case and should not be understood as (a) undermining the certainty of commercial relationships and freedom of contract; and (b) opening the floodgates to claims by individuals intending to escape a bad bargain.

Key takeaways

The decision does not establish a general rule that all franchise agreements contain implied good faith terms and should not be seen as undermining commercial certainty.
Rather, this case demonstrates that such terms “may” be implied where particular factual circumstances exist.
It represents a careful, fact-specific application of existing legal principles rather than a radical departure from established contract law, but nonetheless demonstrates the courts' willingness where the circumstances warrant it to protect vulnerable parties in unequal commercial relationships.

Letters of indemnity

Letters of indemnity and undisclosed principals

Berge Bulk Shipping Pte Ltd v Taumata Plantation Ltd [2025]

In a judgment concerning the application of the undisclosed principal rule, the Court of Appeal has upheld a decision that the English courts do no have jurisdiction to deal with claims brought by a shipowner against three New Zealand exporters under various letters of indemnity.

The case provides a helpful analysis of the law governing undisclosed principals and the law of agency more generally.

Facts

Three New Zealand forestry companies (the Exporters) owned or held logging rights over plantations and exported logs to overseas markets including China and India through an agent, TPT Forests Ltd (Forests). In 2004, the TPT Group established a separate company, TPT Shipping Ltd (Shipping), specifically to charter vessels for log transportation, with the express purpose of ring-fencing the risks inherent in vessel chartering operations.

The arrangement was designed so that "any costs, losses and expenses incurred or suffered by [Shipping] which fall outside the contracted rates in the shipping contract between [Forests] and [Shipping] will not be recoverable from" the Exporters.

When original bills of lading were unavailable at discharge ports in India, Shipping issued Letters of Indemnity (LOIs) to enable cargo discharge, but subsequently became insolvent. Berge Bulk, the vessel owner, commenced proceedings against Shipping, Forests, and the Exporters under the LOIs, serving the claim form on the Exporters in New Zealand without court permission, based on the argument that the Exporters were Shipping's undisclosed principals and the LOIs provided for the jurisdiction of the English court.

The Exporters challenged the English court's jurisdiction, leading to the application that came before the High Court. The judge held that there was no good arguable case that the Exporters were undisclosed principals under either the charterparties or the LOIs. Berge Bulk appealed.

Decision

Considering the application of the undisclosed principal rule, the Court of Appeal confirmed that agency is a consensual relationship which depends upon consent of both parties, the existence of such consent being determined objectively.

The court outlined the principles in Siu Yin Kwan v Eastern Insurance Co Ltd, confirming that an undisclosed principal may sue and be sued on contracts made by agents acting within actual authority, provided the agent intended to act on the principal’s behalf and the contract does not exclude the principal’s rights. He also endorsed the presumption (considered in The Magellan Spirit) that where a contract is made by a named legal person without indication of agency, the presumption is that the named person contracts as principal, requiring "convincing proof" to establish that the named party was contracting on behalf of an undisclosed principal.

Applying these principles in this case, the Court of Appeal decided that the Exporters had the better of the argument that they are not liable as undisclosed principals and dismissed the appeal.

In reaching this conclusion, the court considered the charterparties first. The whole purpose of the establishing Shipping was to insulate both Forests and the Exporters from the risks inherent in acting as the charterer of the vessels. This purpose was inconsistent with any intention that Shipping should act as agents for the Exporters in entering into the charterparties. The insulation of Forest and the Exporters from any obligations as charterer of the vessels was carried into effect in the Agency Agreements.

Having concluded that Shipping entered charterparties as principal, the court found this "a powerful reason to conclude that the LOIs were also issued by Shipping as a principal and not as an agent for the Exporters". The court rejected arguments that Shipping's request for Forests' approval indicated agency, stating this was readily explained on the basis that once the logs were discharged and released to the buyer, the Exporters would lose their security for payment of the purchase price. It therefore made sense to obtain Forests’ agreement if delivery was to be effected in some other way.

Key takeaways

The court's analysis demonstrates that the stated commercial purpose of a corporate structure (in this case, to "ring fence" chartering risks) is highly material when determining whether an agency relationship exists. Courts will examine whether the alleged agency relationship is consistent with or undermines such commercial purpose.
The court reinforced that there is a strong presumption that named contracting parties act as principals, requiring "convincing proof" to establish that the named party was in fact contracting on behalf of an undisclosed principal.

Contributors: Meghan Sugrue, Francesca Jack and Claire Welch

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at September 2025. Specific advice should be sought for specific cases. For more information see our terms and conditions.

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