Articles in Category: Offer to Purchase / Deed of Sale Explained

Offer to Purchase / Deed of Sale Explained


Can a oral agreement to enter into a later sale agreeement of land be valid. Pactum de Contrahendo.

Abigak 1 General Trading & Investment CC v Gani and Another; Gani and Another v Balkin and Others (1184/16; 6620/16) [2017] ZAGPJHC 126 (5 May 2017)

Background
Sometime during 2007 the parties entered into a oral agreement
. The oral agreement they contend for is said to have numerous terms relating to beneficial occupation, obligations for restoration of the property, the payment of outstanding rates and taxes, the payment of an outstanding overdraft and maintenance of the property and It was an express and agreed condition that upon payment of all of the amounts referred to …, a formal written agreement will be entered into between the parties in order to transfer the property into our nominated family trust." ("the material oral agreement term"). A formal written agreement as envisaged in the material oral agreement term has never been concluded.

Judgement

Found that the parties cannot rely on the material oral agreement term (as an enforceable pactum de contrahendo) and as the foundation for the relief sought in the setting-aside application, is unsustainable in law.

Sale of Immovable Property must be in writing.

Always get all essential clauses of a deed of sale in writing.

Sale of Immovable Property must be in writing.

The Alienation of Land Act 68 of 1981 provides:

1. That contracts for the sale of immovable property or rights in immovable property must be in writing and signed by the parties or their duly authorised representatives in order to be enforceable. The Act therefore is the source of the law in South Africa that verbal agreements for the sale of immovable property are unenforceable.

2. That the material terms applicable to a sale of immovable property must be in writing, namely the description of the land sold, the identity of the parties to the contract and the purchase price. If any one of these material terms are not specifically provided for in a written document which is signed by the contracting parties or persons who are authorised by such contracting parties in writing the contract is void and unenforceable.

UA-1709631-55