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Monday, September 25, 2023

Reviewing repudiation of an agreement

This blog site was co-authored with: Jason Hudson, Prospect Lawyer

Platinum Home Business (Pty) Ltd v Mcshane and Another

The Western Cape High Court heard an application for an interdict and particular efficiency associating with the sale and transfer of unmovable residential or commercial property. The buyer and seller concluded a sale arrangement where the buyer would pay the purchase cost of R860 000 for an uninhabited piece of land. Although the purchase cost was properly paid, the seller declined to sign the transfer files and more specified that she was cancelling the arrangement with instant result. The seller was notified that the buyer did decline this cancellation and was even more encouraged to not sign any other deal to acquire. The buyer later on found that the seller had actually undoubtedly offered the unmovable residential or commercial property to another purchaser. This supposed sale arrangement with a 3rd party was the basis for the buyer’s immediate application to interdict the transfer of the residential or commercial property.

Among the primary concerns prior to the court was whether the buyer had actually repudiated the arrangement when it firmly insisted that the transfer procedure be stopped briefly pending the finalisation of the application, and whether the seller had actually validly cancelled the sale arrangement based upon this supposed repudiation.

The court repeated the legal concepts associating with repudiation. Where a celebration to an agreement, with no legal premises, suggests through words or favorable conduct their purposeful and unquestionable intent to no longer be bound by the agreement, they are stated to have actually repudiated the agreement. Where this takes place, the other celebration might rescind the agreement. The agreement ends upon interaction of this choice. The test is whether the conduct displays an intentional and unquestionable intent no longer to be bound by the agreement.

The breach stipulation in the sale arrangement makes it clear that in order to cancel the sale arrangement, either among the celebrations should remain in breach of any of the regards to the sale arrangement. In this regard, it can not be specified that there was an indisputable intent by the buyer to not be bound, as the buyer did undoubtedly plan to carry out as soon as the matter in the court was settled. The court specified that it was rather the seller who repudiated the sale arrangement when she unquestionably revealed her intent to resile from the agreement.

The test for repudiation is unbiased, particularly whether a sensible individual would conclude that correct efficiency will not be upcoming.

The court discovered that:

  1. It might not be specified that the buyer’s directions to postpone the transfer pending a decision on the concern of expenses by the court totaled up to repudiation of the agreement nor did it make up a breach in regards to the sale arrangement.
  2. The buyer did not, by words or conduct, suggest that it would not carry out in regards to the arrangement.
  3. The correspondence in between the buyer and the seller’s lawyers suggested that the buyer considered itself bound by the arrangement.

Appropriately, the court validated that the buyer did not repudiate the agreement and purchased that the unmovable residential or commercial property be moved into the buyer’s name in accordance with the sale arrangement.

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