A cell phone service provider had wrongfully repudiated a contract with a dealer in cell phone products.  The Supreme Court of Appeal held that the indemnity clause did not preclude the dealer from claiming damages.  The clause which excluded liability for indirect damages did not preclude the damages claim because the amount claimed did not amount to consequential damages.

In general under the common law, an innocent party to a contract is entitled to be placed in the position it would have occupied had the contract been performed, so far as that can be done by the payment of money, without undue hardship to the defaulting party.  Such damages are awarded as flow naturally from the breach or as may reasonably be supposed to have been contemplated by the parties.  These are direct damages and not consequential damages.

In the course of the contract, the business had been closed in one shopping centre and opened in a mall approved by the service provider.  The service provider nonetheless argued that the mall store should not be taken into account in computing the damages because it was not reflected as a business in annexure A to the agreement, which contained a non-variation clause.  The non-variation clause could not be relied on where there was specific provision in the agreement for the substitution or addition of a new store according to a procedure which had been followed by the parties when the business moved.

[MTN Service Provider (Pty) Ltd v Belet Industries CC t/a Belet Cellular [2021] ZASCA 07 (15 January 2021)]