“MOUNTAINS ARE NOT FAIR OR UNFAIR – THEY ARE DANGEROUS”. SO TOO IS AGREEING TO OBLIGATIONS UNDER A LOAN AGREEMENT
68 Wolmarans Street Johannesburg (Pty) Ltd and Others v Tufh Limited (1263/2022) [2024] ZASCA 48 (15 April 2024)
The above quote from Reinhold Messner, the first person to summit Mount Everest without oxygen and who climbed all the ‘eight-thousanders’ (the name for the 14 mountains recognised by the International Mountaineering and Climbing Federation as being more than 8 000 metres above sea level), is apt to describe the dispute in the above judgment. The borrower under a loan agreement argued, amongst other things, that it was unfair and against public policy to allow the lender to accelerate payment of the full debt after the borrower had defaulted – not because of missing an instalment, but because it failed to settle the monthly municipal accounts in respect of the property development for which the loan was earmarked. It was an express obligation in the loan agreement to pay the municipal charges monthly, in full.
Putting pen to paper in agreeing to obligations under a contract can be dangerous because the law holds both parties to the terms of their own agreement. Courts will only in exceptional circumstances find that an agreed term in a contract is unfair and against public policy, and hence may be disregarded.
The judgment can be viewed here
Summary of the Judgment
THE TOUGH TASK TO ARGUE THAT A BUYER HAD WAIVED THE BENEFIT OF A SUSPENSIVE CONDITION IN A SALE AGREEMENT
Christopher Charles Hughes v Nicolas Gargassoulas and Others (1030/2022) [2024] ZASCA 46 (12 April 2024)
This judgment deals with a set of facts that illustrates a few of the critical dangers that can sink an agreement. Here, as a brief outline, the buyer demanded return of a R1 million deposit after he could not secure a bond by the due date recorded in the agreement’s suspensive condition clause. The seller insisted on retaining the deposit as damages suffered, arguing that the purchaser had waived the benefit of the suspensive condition. This was because, whilst engaging with banks regarding financing, the buyer e-mailed the conveyancers indicating that he would pay the balance of the purchase price in cash. The facts of the matter provide the answer.
