In the matter of Phepeng and Another v Estate Late Ame Combrinck and Others (792/2017)  ZAFSHC 54, a property was sold ‘subject to a loan offer, quotation and pre-agreement’ from a bank. The purchaser received a loan offer from ABSA Bank, but this was not accompanied by a quotation and pre-agreement from the bank as required in the sale agreement. The purchasers nevertheless advised the seller of their acceptance of the ‘loan offer’ within the time frame as set out in the sale agreement.
The seller, however, re-sold the property at a higher price, having taken the view that the purchaser had not obtained a proper approval of the bond within the time period and in the manner stipulated in the sale agreement, and that the first agreement had accordingly lapsed.
The purchasers on the first sale approached the court for an interdict, to stop the transfer of the property to the second buyer.
They were successful in their court application and the court found that to the extent that the suspensive condition to the sale agreement might not have been fully complied with, the bond clause was inserted into the contract for the benefit of the purchasers who had the right to waive compliance with this clause. Their communication to the seller of their acceptance of the ‘loan offer’ from ABSA constituted such waiver.
The seller was obliged to transfer the property to the first purchaser, and could face a possible damages claim from the second buyer.
Care must, therefore, be taken before a property is re-sold to make sure that the previous agreement has indeed lapsed, or alternatively, has been properly cancelled in the event of a breach of contract.