Van der Merwe v Bonnievale Piggery (Pty) Ltd

The appellant, Mr Van der Merwe, purchased slaughtered pig carcasses from the respondent, Bonnievale Piggery (Pty) Ltd, under a series of interlinked oral agreements concluded in 2005. These included periodically negotiated contracts of sale at market-related prices, an exclusive supply agreement, and a sole distributorship arrangement in the Western Cape. Prices fluctuated according to market conditions and were renegotiated several times a year. In July 2012 the parties reached a deadlock and could not agree on the price of approximately 1 300 heavyweight pigs. As a result, their business relationship terminated. Bonnievale later sued Van der Merwe for payment of R1 196 868,84 for carcasses delivered in January and February 2013, which Van der Merwe admitted receiving. Van der Merwe counterclaimed for damages, alleging breach of contract and unlawful competition, contending that Bonnievale failed to adjust prices downward, used confidential information obtained via a cession of book debts, and solicited his customers.

The appeal was dismissed with costs, including the costs of senior counsel. The full court’s order granting judgment in favour of Bonnievale Piggery for R1 196 868,84 with interest and dismissing the counterclaim was upheld.

The case clarifies that where contracts depend on ongoing consensus on price, failure to agree may terminate the contractual relationship without breach. It affirms that ‘market-related price’ clauses do not constitute enforceable deadlock-breaking mechanisms unless objectively determinable standards are agreed. The judgment also reinforces principles on unlawful competition and confidentiality, confirming that standard commercial information and data disclosed under a cession of book debts are not inherently confidential.