Division:Supreme Court of Appeal
Coram: Scott, Lewis JJA et Griesel AJA
Heard: 7 November 2008
Delivered: 21 November 2008
Property owned by the first and second appellants was sold at a public auction to the respondent. In terms of the conditions of sale the appellants, being the sellers, had seven days to confirm the sale. The High Court, Pretoria, held that no agreement of sale was concluded on the date of the auction; all that happened was that the respondent bound itself to keep its offer open for seen days. The SCA agreed with the High Court on this issue.
The SCA, however, overruled the High Court's decision that a sale would only come into existence when the sellers' confirmation of the sale was communicated to the respondent. The SCA held that having regard to the terms of the conditions of sale it was clear that the sale was confirmed, .ie a sale came into existence, the moment the Sellers signed the conditions of sale.
In the judgement Scott JA criticises the Conditions of Sale for being poorly drafted and couched in a language suggestive of a sale subject to a suspensive condition. It reads as follows:
'The Properties shall be provisionally sold to the highest bidder subject to confirmation of the sale by the Seller within seven (7) days and the highest bidder shall be bound by his bid for seven (7) days from date of signature of these conditions by the Purchaser'
Nevertheless (at ) In terms of clause 1 of the conditions of sale the respondent bound itself to keep its bid open for a period of seven days. To that limited extent a binding contract came into existence. The true nature of that contract was an option granted by the respondent to the sellers to sell the properties on the terms and conditions set out in the document. I accordingly agree with the court a quo that on a proper construction the reference in the conditions of sale to the confirmation of the sale had to be construed as a reference to the acceptance of an offer.
Turning to whether the offer was accepted within the seven-day period the judge said that it is necessary to consider the terms of the offer to determine the mode of acceptance required. Here he endorses the views of Grosskopf AJ in Reid v Jeffreys Bay Property Holdings (Pty) Ltd 1976 (3) SA 134 (C) at 137D-G E M where he said the following:
'However, even when writing is not a formal requirement, written contracts are an everyday occurrence in the commercial world. The object of reducing a contract to writing (whether voluntarily or required by statute) is normally to achieve certainty and to facilitate proof (cf, eg, Woods v Walters, 1921 AD 303, Van Wyk v Rottcher's Saw Mills (Pty) Ltd 1948 (1) SA 983 (A)). It is presumably for the same reason that the date and place of signature is normally specified in written contracts. The signing of a written contract is the usual manner in which parties indicate their agreement to its terms and certainty as to the place and date of the conclusion of the contract can be equally as important for the parties to the contract as certainty as to its content. Consequently it is inherently improbable that any of the parties to such a contract would intend that the time and place of the conclusion of the contract would be determined not from the document itself but by way of evidence aliunde.'
In the facts of the present case the signature of the sellers would have served as a recordal of the date and place of the 'confirmation' and therefore the clearest indication that the mode of acceptance was to be the signature of the sellers.