In Maria Luisa Palma Codevilla v. Paula Jane Kennedy NO & Others, the Supreme Court of Appeal of South Africa had to determine whether an agreement for the purchase and sale of an immovable property can be revived, subsequent to the lapse of a suspensive condition.
CFW & SDB ‘’the purchasers’’ made an offer to purchase an immovable property ‘’the property’’ from PJK NO ‘’ the seller’’ for the purchase price of R5 150 000.00. The offer to purchase was accepted on 4 February 2020. It was a suspensive condition of the sale agreement that the purchasers are to provide confirmation of bond approval by no later than 14 February 2020.
On 11 February 2020, the sellers and purchasers concluded an addendum in terms of which the date for providing of bond approval was extended to 19 February 2020 ‘’first addendum’’. The bond approval could not be provided by 19 February 2020, and the sale agreement, as amended by the addendum, accordingly lapsed.
On 20 February 2020 the parties concluded a second addendum ‘’the second addendum’’ in terms of which the deadline for providing of bond approvals was extended to 25 February 2020. Subsequent to the conclusion of the second addendum, the purchasers found themselves unable to meet their financial obligations and sought to cancel the agreement on the basis that there was no valid agreement as it has lapsed due to unfulfilled suspensive condition by 19 February 2020 in terms of the first addendum.
The seller did not accept that the sale agreement lapsed and elected to uphold the contract. The seller was of the view that the second addendum renders the agreement valid as it records the parties’ intention to sell the property on the terms set out in sale agreement.
The Court, finding in favor of the Appellant (the purchasers), held as follows:
- It is trite that upon failure of a suspensive condition, the contract lapses and is of no force or effect.
- The purported revival of the sale agreement and extension of the timeframe for fulfilment of the suspensive condition, after the expiry of the date for its fulfilment, is legally incompetent. Consequently, the sale agreement could not be revived, and its terms and conditions became unenforceable.
- As a suspensive condition cannot be extended after the time for the fulfilment of the condition has passed, the parties had to enter into a new agreement which can be on the same terms as old sale agreement.
Consequently, the Court ordered that the sale agreement together with the second addendum are invalid and unenforceable. As a result, the seller could not enforce the sale agreement’s terms.
This judgment emphasizes the consequences of unfulfilled suspensive condition. It also highlights the importance of ensuring validity and enforceability of an agreement by the parties prior to execution or enforcement thereof.
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Written by: Mawande Delani | Associate
Litigation Department, Claremont
