Park 2000 Development (Pty) Ltd v Page (905/2010) [2011] ZASCA 208 (29 November 2011)
This recent court case dealt with the “bond clause” and suspensive conditions in a deed of sale relating to the sale of land. In this case the deed of sale contained a suspensive condition to the effect that the sale was subject to the purchaser obtaining a loan (bond) by a certain date. The purchaser did not obtain the bond by the stipulated date. However, the clause in the agreement which contained the suspensive condition (relating to the obtaining of the bond by the purchaser) was poorly worded and this created uncertainty regarding the meaning of the clause.
The purchaser claimed that, even though the bond had not been granted by the stipulated date, the agreement was binding and he was entitled to transfer of the property into his name.
The court stated that the condition was clearly a suspensive condition which made the sale subject to the purchaser obtaining a bond by a certain date. It confirmed the principle that a sale lapsed if a suspensive condition was not fulfilled by the stipulated date and that the sale agreement could not be enforced by the seller or the purchaser. In this case, as the purchaser had failed to obtain the bond by the stipulated date, the sale had lapsed and the purchaser was not entitled to transfer of the property.
This case serves as yet another lesson to persons drafting contracts (and sellers and purchasers who sign contracts) to ensure that the wording of the contract is clear and unambiguous. Our law is clear on the nature and effect of suspensive conditions and the consequences of the non-fulfillment of such conditions. However, poor drafting (wording) of such contracts often leads to expensive litigation.
At Wilson McWilliams Inc we provide expert, professional advice on the drafting of contracts and the sale and transfer of property.