Background

SFM, an authorised marketer and sole licensee for certain citrus varieties, had longstanding arrangements with both respondents for the export marketing of their fruit. Disputes arose ahead of the 2025 harvest, leading SFM to seek urgent relief to compel the respondents to deliver fruit for marketing in accordance with alleged agreements.

Key issues

The central questions before the court were:

• whether new, enforceable marketing agreements had been concluded between SFM and the respondents for the 2025 harvest season; and
• whether the respondents’ unilateral revocation of SFM’s authority as agent was lawful, or whether SFM’s mandate was irrevocable due to a protectable interest.

SFM and New Day Packing had previously entered into a memorandum of understanding (MOU) in 2017, which contemplated the conclusion of separate marketing agreements. While an unsigned draft agreement existed, no signed marketing agreement was in place. SFM argued that the parties had conducted themselves substantially in accordance with the provisions of the unsigned MOU and that evidenced at least a tacit agreement.

After a protracted exchange of correspondence between the parties and their attorneys, it became clear that the relationship between the parties was in jeopardy, with New Day Packing becoming increasingly dissatisfied with the quality of service it received from SFM. New Day Packing’s attorneys notified SFM of New Day Packing’s election to terminate SFM’s mandate and to revoke SFM’s authority thereunder with immediate effect, except to the extent that SFM had already committed any specific fruit to the market.

The facts between Entabeni and SFM were similar. The parties had entered into a written marketing agreement on 6 November 2020, which was set to expire in 2029. Entabeni sought to terminate the agreement in early 2025, citing alleged breaches by SFM. After a series of exchanges, Entabeni’s attorneys similarly notified SFM of the revocation of its authority, except to the extent that fruit had already been committed to the market.

In both cases, SFM contended that the revocation of its authority in the correspondence excluded the 2025 harvest and that this exclusion amounted to a tender in respect thereof. In each case, SFM sought enforcement of a “new agreement” that it alleged arose as a result of its acceptance of the “tenders” made in correspondence from the respondents’ attorneys.

The court found that, in both cases, the correspondence did not amount to a distinct offer capable of acceptance, and that no new enforceable agreement had arisen from the correspondence. The respondents’ revocation of SFM’s authority, except to the extent that fruit had already “committed” to the market, was interpreted narrowly by the court: the exception applied only where SFM had become irrevocably bound to third parties for the sale of specific fruit, which was not the case in either instance.

The conclusion of the court in both instances was that the revocation of SFM’s authority was lawful, that SFM was not entitled to the delivery of the 2025 harvest and, accordingly, that SFM’s applications be dismissed. 

Lawfulness of revocation

The court reaffirmed the common law principle that a principal may unilaterally revoke an agent’s authority, even if the underlying contract is for a fixed term or described as irrevocable. The agent’s remedy, in the event of breach, lies in a claim for damages rather than specific performance. The only exception is where the authority is coupled with a protectable interest (mandatum in rem suam), such as security for a debt. SFM’s asserted “business interest” in maintaining supply chains and market share did not qualify as such an interest.

The judgment underscores the importance of clear, enforceable agreements in agency relationships and confirms the principal’s right to revoke an agent’s authority, subject only to narrow exceptions. Agents seeking to protect their mandates should ensure that any claimed irrevocability is supported by a genuine, protectable interest as recognised by law.