This judgment deals with the uncomfortable situation which arises when payment is effected in terms of a guarantee and it later transpires that there were irregularities with the underlying agreement. The question here was whether payment in terms of a building guarantee can be recalled because of fraudulent representations relating to liability in terms of the underlying building contract. It is important for all property practitioners to take note of the judgment since the finding also applies to guarantees issued in respect of the purchase price of a property in a sale agreement relating to immovable property.
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