Cellular Insurance Managers (Pty) Ltd v Foschini Retail Group (Pty) Limited

Foschini Retail Group (Pty) Ltd and Cellular Insurance Managers (Pty) Ltd (CIM) concluded an oral agreement in 2001 in terms of which Foschini marketed cellular phone insurance policies on behalf of CIM. For each policy sold, CIM was obliged to pay Foschini an administration fee upon receipt of each premium paid by customers. The agreement was silent on duration and was terminable on reasonable notice. Foschini terminated the agreement with effect from 2 April 2007. After termination, CIM continued to receive premiums from policies sold prior to termination but refused to pay Foschini the administration fees accruing thereafter. Foschini sued for payment of approximately R6 million in administration fees collected post-termination, together with interest and an accounting.

The appeal was dismissed with costs, including the costs of two counsel. The High Court order requiring CIM to pay the administration fees, provide an accounting, and pay costs was confirmed.

The case clarifies South African contract law on the effect of termination on accrued rights in running or executory contracts. It affirms that termination does not extinguish rights that have already accrued, even if their enforcement or payment is postponed until after termination, and that terms implied by law cannot contradict express contractual terms.