Whether you are a keen golfer or not and whatever your reasons for buying property, always keep this in mind - you are bound by the written sale agreement. Consequently, never rely on any representations made to you unless they are written into the sale agreement – for almost a century, our law has been that a written contract is accepted as the sole evidence of what you have agreed: “The rule is that when a contract has once been reduced to writing, no evidence may be given of its terms except the document itself, nor may the contents of such document be contradicted, altered, added to or varied by oral evidence”.
Our courts have allowed very few exceptions to that basic principle, and a recent SCA (Supreme Court of Appeal) decision illustrates the dangers of disregarding it.
Promises, Promises
- On 10 March 2004 the buyers signed an agreement to purchase a property in an upmarket Golf Estate.
- In the agreement of sale the developer had undertaken to, within a reasonable time, construct for the development “a clubhouse built and furnished in accordance with the upmarket quality and nature of the proposed development”.
- The agreement contained standard “non-variation” and “non-representation” clauses, making the agreement the sole record of its terms and conditions.
- A newsletter issued in November 2004 gave more detail on the proposed clubhouse, encapsulating an architect’s specifications and design of how it was going to look.
- However the developer, citing the adverse “financial and market conditions” prevailing at the time, only constructed a ”temporary clubhouse”, saying it would construct another one only when it was “financially prudent and economically viable to do so”. “We have”, said the developers when challenged, “already provided clubhouse facilities which are adequate for the present needs of the development”.
- The buyers, contending that this “temporary clubhouse” didn’t comply with the sale agreement (although they conceded that it was in keeping with the “upmarket quality and nature” of the development), successfully sued the developer in the High Court, which ordered the developer to build a clubhouse in compliance with the November 2004 newsletter.
- On appeal however, the SCA held that the newsletter could not be relied on, since it was never signed by the parties and was therefore never a term of the sale agreement.
- Accordingly the newsletter could not be used to “amplify or lend content” to the “vague” clubhouse undertaking given by the developer in the sale agreement.
- The end result is that the buyers must make do with their “temporary clubhouse” – no doubt putting a bit of a damper on their future 19th Hole get-togethers.
What counts is your written agreement – and it can’t be vague
Don’t rely on anything said to you – verbally or in writing – outside the written, signed sale agreement. And make sure that your agreement sets out clearly and unambiguously exactly what you are agreeing to – otherwise it could be held “void for vagueness” and unenforceable.
Most important of all, take advice before you sign anything!
Jack Crook (LLB Lond, LLB Rhod) is the author of LawDotNews, a monthly newsletter which is personalised and e-mailed to your firm's clients compliments of your firm. Readers are welcome to contact Jack, or visit his web site at http://www.dotnews.co.za for further details.
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