.jpg) |
|||
FAILURE TO COMPLY WITH PROVISIONS OF DEED OF SALETO ALL EXTENDED BUSINESS PARTNERS |
|||
|
Number |
24/2016 |
||
|
In a recent judgement, namely Macakati v Larry and Others (6776/2016) [2016] ZAWCHC73 dated 15 June 2016 (case attached for ease of reference) the court had to decide whether a purchaser who fails to timeously make payment of costs and the balance of the purchase price, but makes payment after being placed on terms can claim transfer in terms of the contract so breached.
In this matter the property purchaser was late in making payment of costs and the balance of the purchase price and, even after demand to pay, within seven days - failing which the agreement would be cancelled, the purchaser only made the payment a few days after the stipulated period. Thereafter, without however sending a formal letter of cancellation, the seller sold the property to a third party. The court held that because the deed of sale contained a clause which afforded the seller the right to cancel the contract upon the happening of a specific event, a so called lex commissoria, the seller is not deprived from cancelling the agreement. Thus after the purchaser was placed on terms and at the end of the said term period, the seller acquired a right to cancel the deed of sale which could not be cured by late payment by the purchaser. It was further held that the general principle is that a delay, even an unreasonable delay, in exercising a right of cancellation will not deprive the party of the right to cancel. The right will only be lost if, in all the circumstances, it can be shown by the other side that the party with the right to cancel elected to abide by the contract rather than cancel it. The passing of time may be one of the factors from which such an election can be inferred, but the passing of time does not in itself lead to that conclusion. Conclusion It is imperative that this judgement be read in context. The conveyancer who had been dealing with the first sale received the money in trust as it was an electronic funds transfer. They, however, did not have instructions to take further steps to process the transfer of the property to the purchaser. The fact that the seller proceeded to sell the property to the new purchasers, was indicative of an intention not to abide by the first sale - although not communicated by way of a formal notice of cancellation, the fact of the sale to new purchasers was apparent in the communication from the new attorney's initial purchaser and was an unequivocal statement that the instructions to the initial conveyancers had been cancelled. For any queries please contact our property law division at the details below: Allen West Daleen Loubser |
|||
.jpg){kind=small} |
|||
|
Disclaimer: This newsflash is for general information only and should not be used as legal or professional advice. No liability can be accepted for any errors or omissions, nor for any loss or damage arising from reliance and any information therein |
|||