Freddy Hirsch Group (Pty) Ltd v Chickenland (Pty) Ltd

Chickenland (a Nando’s group company) purchased spice packs from Freddy Hirsch Group for use in sauces and marinades sold locally and internationally. Some spice packs contained Sudan 1 dye, a banned carcinogenic substance, rendering the food unlawful for human consumption. This contamination led to a worldwide recall of Chickenland’s products, significant wasted expenditure, and economic loss. Hirsch sued Chickenland for payment of outstanding purchase price. Chickenland admitted the debt but counterclaimed for repayment of amounts already paid and for damages in contract and delict arising from the contamination. Hirsch relied on standard terms limiting liability and excluding consequential damages.

The appeal was dismissed with costs, including the costs of two counsel. The High Court’s finding that Chickenland’s counterclaims could proceed was upheld.

The case clarifies the limits of contractual exemption and indemnity clauses in South African law, particularly where contractual performance is illegal or contrary to public policy. It distinguishes defective performance from non-performance and reinforces that parties cannot contract out of statutory prohibitions or criminal liability. The judgment is important for claims involving pure economic loss arising from unlawful products in commercial supply chains.