Consol Limited t/a Consol Glass v Twee Jonge Gezellen (Pty) Ltd and Another

Consol, a manufacturer of glass bottles, supplied wine bottles to Twee Jonge Gezellen under a standard-form supply agreement concluded in 1991. In 1996 Consol supplied nearly 30 000 cap classique sparkling wine bottles which had been internally treated with Freon 134A gas to prevent bloom. This treatment was not disclosed to Twee Jonge Gezellen. During the second fermentation process of its 1994 vintage sparkling wine, Twee Jonge Gezellen experienced severe production problems and alleged losses exceeding R10 million, which it attributed to the Freon treatment. Consol sued for the purchase price of bottles supplied in 1998, which was largely undisputed. Twee Jonge Gezellen counterclaimed for damages arising from the alleged defective bottles. Consol relied on the exemption, limitation and claims provisions in the supply agreement to resist liability.

The appeal and cross-appeal were dismissed. Consol was entitled to rely on the exclusion of liability for consequential loss, with the result that Twee Jonge Gezellen’s claim in reconvention could not succeed.

The case is a leading authority on the interpretation of standard-form commercial contracts in South African law, particularly the distinction between contractual obligations and non-binding recitals. It clarifies how ‘standard’ manufacturing procedures and materials are to be assessed in continuing supply agreements and confirms the enforceability of clearly worded exclusions of consequential loss.