Pagnan SpA v Feed Products [1987] 2 Lloyd’s Rep. 601
Contract – Uncertainty – Agreement to Agree
Facts
Pagnan SpA were an Italian company seeking to buy corn pellets to feed chickens with from Feed Products, an American company. The contract was governed by English law. The parties had reached agreement on the main points of the contract, such as the price, the product, the quantity and the period of shipment. However, they had not yet reached agreement on several other important parts of the contract, such as the loading port, the rate of loading and several other charges which may have become payable if certain events came to pass. The parties in any event began performance, when difficulties arose from the fact that they had not arranged all the central matters of the agreement.
Issues
Whether or not the contract was enforceable. Whether or not the contract could be considered void for uncertainty as important matters were yet to be agreed.
Decision/Outcome
The agreement did have contractual force and could be enforced. Parties may be bound by an agreement even where there are further terms to agree. If agreement on these terms is not reached then the existing agreement does not become void unless it renders the entire contract ‘unworkable’. Whether a contract has been concluded or not depends on the court looking at the whole course of correspondence. In this case, the agreement was not stated to be ‘subject to contract’ and the parties had begun to carry out performance. What will be an ‘essential’ term of any agreement and which must therefore be agreed for the sake of certainty depends on the facts, and whether or not it renders an agreement unworkable.
Updated 19 March 2026
This case summary accurately reflects the decision in Pagnan SpA v Feed Products Ltd [1987] 2 Lloyd’s Rep 601. The legal principles described — concerning when a contract may be binding despite outstanding terms, the significance of part performance, the absence of a ‘subject to contract’ qualification, and the ‘unworkable’ test for uncertainty — remain good law and continue to be applied by English courts. The broader doctrinal framework on uncertainty and agreements to agree, as articulated in cases such as Scammell v Ouston [1941] AC 251 and Foley v Classique Coaches [1934] 2 KB 1, has not been materially altered by subsequent legislation or case law. No statutory changes affect the accuracy of this summary. Readers should note that this is a case summary only and does not address the full range of judicial commentary on contractual uncertainty, including later Court of Appeal and Supreme Court decisions such as MRI Trading AG v Erdenet Mining Corporation LLC [2013] EWCA Civ 156, which further elaborated on similar principles.
