In DAZN Ltd v Coupang Corp [2025] EWCA Civ 1083 ('DAZN'), the Court of Appeal (Newey LJ; Arnold LJ; Popplewell LJ) dismissed an appeal against a first instance decision that a legally binding contract had been formed between two parties (the 'contractants') in respect to broadcasting rights for the FIFA Club World Cup 2025. In doing so, Popplewell LJ (with whom Arnold LJ and Newey LJ agreed on this issue), considered the law as to when a legally binding contract will form, though the would-be contractants/contractants, recognise that some matters are still to be agreed. Under the heading 'The law', Popplewell LJ, at paragraphs 5 to 11, said:
'5. The legal principles applicable were not substantially in dispute. In Smit Salvage BV v Luster Maritime SA (The Ever Given) [2024] EWCA Civ 260 [2024] 2 All E.R. (Comm) 504 | [2024] 2 Lloyd's Rep. 86, Males LJ said:
"18. The principles to be applied in deciding whether parties have concluded a legally binding contract even though they recognise that some matters are still to be agreed are well established and were not disputed. The leading cases are RTS Flexible Systems Ltd v Molkerei Alois Mueller GmbH & Co KG [2010] UKSC 14, [2010] 1 WLR 753, Pagnan SpA v Feed Products Ltd [1987] 2 Lloyd's Rep 601, and Global Asset Capital Inc v Aabar Block Sarl [2017] EWCA Civ 37, [2017] 4 WLR 163.
19. In summary, 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.
20. There are well-known formulae which can be used to make clear that parties have not yet reached the stage of a binding contract, such as 'subject to contract' or, in a maritime context, 'subject details' or 'fixed on subjects', but the absence of such terms (which were not used in the present case) is not decisive. All depends on the parties' words and conduct towards each other, considered in their context."
6. Four aspects of these principles merit further observation. The first is the particular importance of the requirement that the Court should look at the whole of the negotiations between the parties, both before and after those which are said to constitute the making of a binding contract. In Global Asset v Aabar, Hamblen LJ said:
"28. It is well established that when deciding whether a contract has been made during the course of negotiations the court will look at the whole course of those negotiations –see Hussey v HornePayne (1878) 4 App Cas 311.
29. As Lord Cairns observed in that case at 316:
"…You must not at one particular time draw a line and say "We will look at the letters up to this point and find in them a contract or not, but we will look at nothing beyond". In order fairly to estimate what was arranged and agreed, if anything was agreed between the parties, you must look at the whole of that which took place and passed between them".
30. The rationale of this approach is that focusing on one part of the parties' communications in isolation, without regard to the whole course of dealing, can give a misleading impression that the parties had reached agreement when in fact they had not - see Lord Selborne in Hussey at 323."
7. The rationale identified in [30] applies equally to the converse. Focusing on one part of the parties' communications in isolation, without regard to the whole course of dealing, can give a misleading impression that the parties had not reached agreement when in fact they had.
8. As Longmore LJ observed in GNER v Avon Insurance [2001] 2 Lloyd's Rep 649 at [29], a focus on what the parties have said after the moment at which it is contended that a contract was concluded may be very relevant to whether a term has been agreed. It may equally be very relevant to whether a concluded contract has been made. This is because, in the memorable phrase of Bingham J in Pagnan, the parties are the masters of their contractual fate in deciding what terms they regarded it as essential should be agreed in order for a binding agreement to come into effect (see Lloyd LJ in Pagnan at p. 619 RHC at (6)). If subsequent communications show that the parties considered themselves to have made a binding agreement notwithstanding that further terms remained to be agreed or a further document executed, that is powerful evidence that such a binding agreement was made.
9. Secondly, where the parties have agreed that there will be a subsequent formal written contract, the question of whether their agreement is subject to contract, in the sense that they do not intend it to have legal effect unless and until such a formal contract is signed, will be heavily dependent on whether they have agreed all the terms which they regard as essential, or whether there is to be left to the subsequent contract agreement of terms which the parties regard as significant to their rights and liabilities. This too is an aspect of the principle that the parties are the masters of their contractual fate. Two cases illustrate this approach. In British Steel Corporation v Cleveland Bridge and Engineering Co Ltd [1984] 1 All ER 504, Robert Goff J held that no contract had been concluded when it was contemplated that it would be subject to standard terms but without agreement on whose terms, and the standard terms of the parties contained very different liabilities for defective goods and delay. By contrast in Immingham Storage Company v Clear Plc [2011] EWCA Civ 89, 135 Con LR 224, this court upheld an agreement in which there was to be a subsequent formal contract but the parties had agreed "all the terms of any significance to a contract of the type under consideration." David Richards J, giving the judgment of this court, said at [26]:
"[26] These factors point, overwhelmingly in our judgment, to an intention to create a contract if the claimant accepted the defendant's offer. Set against those factors, the provision that a 'formal contract will then follow in due course' does not indicate that the claimant's acceptance of the signed quotation will be no more than an agreement subject to contract. It is, as stated by Parker J in Von Hatzfeldt-Wildenburg v Alexander [1912] 1 Ch 284 at 289, [1911–13] All ER Rep 148 at 151, 'a mere expression of the desire of the parties as to the manner in which the transaction already agreed to will in fact go through'".
10. Thirdly, in construing written communications between the parties, it is important to recognise that business people conducting commercial negotiations will often not use the precision of language which lawyers aspire to in contract drafting. Their language may be imprecise, ungrammatical and impressionistic. Their communications must be interpreted by reference to the substance and sense of what is said, not by the kind of intense examination of the words, syntax and grammar to which a contract carefully drafted by lawyers may be subjected.
11. Fourthly, it will be relevant if the parties' negotiations take place in a context where performance of any agreement reached is urgent. If so, that makes it more likely that the parties would wish to be bound notwithstanding that further details may remain to be agreed or a formal contract drawn up.'.
On the facts, in respect to a series of emails (the communications), Popperwell LJ said, at paragraph 15:
'Applying the legal principles which I have identified and looking at the communications as a whole, it seems clear to me 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.'
Note, the above scenario is subletly different to the scenario where the contractants / would-be contractants expressly deal with an issue (for instance, what the price for the product/service being purchased, will be) in their (putative) contract by stipulating that they will agree the issue (the price) at a later date. For a case on this scenario, see KSY Juice Blends UK Ltd v Citrosuco GmbH [2025] EWCA Civ 760 (Baker LJ; Popplewell LJ; Zacaroli LJ)
Collatory Case Series
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