Is an agreement to agree an enforceable contract?


In the recent case of MRI Trading AG v Erdenet Mining Corporation [2013] EWCA Civ 156 the Courts were tasked with deciding whether obligations could render an ‘agreement to agree’ enforceable.

What is an ‘agreement to agree’?

An ‘agreement to agree’ is a contract which leaves key clauses to be agreed in the future, creating enough uncertainty in the contract for it to be rendered an unenforceable contract.

The Facts

Further to a dispute concerning the sale of copper concentrates, a settlement agreement was entered into by Erdenet Mining Corporation LLC (EMC) and MRI Trading AG (MRI). EMC agreed to sell MRI the copper concentrates in accordance with three contracts appended to the settlement agreement. Two of the contracts were scheduled for performance in 2009 and the third in 2010. The contracts were agreed with the exception of a few points to be agreed in the future. The 2009 contracts were both performed in accordance with the agreed terms. However, EMC argued that the 2010 contract was unenforceable as it contained terms to be agreed in the future relating to the shipping schedule, treatment charges and refinement charges, effectively rendering it an ‘agreement to agree’.

The 2010 contract contained an arbitration clause allowing for disputes to be resolved by arbitration. The arbitration panel agreed with EMC and rendered the contract unenforceable. MRI lodged an appeal to the High Court on the basis that the arbitration panel had made an error of law. The High Court found in favour of MRI and overturned the decision of the arbitration tribunal. Following this, EMC appealed to the Court of Appeal and the appeal was dismissed.

The Decision

The Court of Appeal considered the principles laid down in the case of Mamidoil-Jetoil Greek Petroleum Company SA v Okta Crude Oil Refinery concerning ‘agreements to agree’. The Court held that an ‘agreement to agree’ turned on one of two points: either the parties had intended that key matters were to be decided in the future, with each party having the ability to agree or disagree: or the matters to be decided in future could be done so by some objective criteria of fairness or reasonableness. It was held that this case was in the latter category and the contract was held to be enforceable.


The Court of Appeal stated that every case turns on its facts. However, the key points in this case were:

(i) the contract had already been part performed, thus conferring a benefit on one or both parties;
this was a commercial dealing between parties that were familiar with the trade, and who had acted in the manner representative of a binding contract;
the parties’ conduct and language conveyed that they had a clear intention to create legal relations, especially as they had included an arbitration clause in the event of a dispute arising;
(iv) the outstanding items were capable of being made certain by a third party applying reasonableness; and
while the parties had used the term ‘to be agreed’, it was sensible for these particular matters to be decided in the future and the tribunal should have sought to preserve rather than destroy the parties’ bargain.

The decision confirms that the Courts are willing to give effect to contracts where the parties obviously intend to enter into an enforceable contract.