EMPLOYEES: YOUR NEW RIGHTS TO PATERNITY AND PARENTAL LEAVE

It has taken over a year of confusion and delay around when new changes will be implemented, but finally your extended rights to parental leave and to an Unemployment Insurance Fund (UIF) claim have fully commenced.

Here’s an update/refresher –

  • New mothers are still entitled to 4 consecutive months’ maternity leave.
  • New “parents” (which would include fathers and same-sex partners) are entitled to 10 consecutive days’ “parental leave”.
  • An adoptive parent of a child under 2 years old is entitled to 10 consecutive weeks’ adoption leave. Where there are two adoptive parents, the other is entitled to only the 10 consecutive days’ “parental leave” (the two adoptive parents should decide between them who gets 10 weeks and who gets 10 days).
  • Commissioning parents in a surrogacy agreement have the same entitlements as adoptive parents.
  • The law does not force your employer to give you paid leave – the above entitlements are for unpaid leave only. So unless your employment contract entitles you to paid leave you are limited to claiming from the UIF (assuming you are a qualifying contributor). That will give you 66% of your salary subject to a standard earnings cap.

And a note for employers: if you haven’t already done so, take advice now on reviewing your maternity and parental leave policies.

For more information, contact Tracey Mouton at Goldberg & de Villiers Inc on 041 5019800. Email traceym@goldlaw.co.za

 

DISCLAIMERS, INDEMNITIES AND EXEMPTION CLAUSES! WHEN FUN TURNS TO DANGER!

Suppose you visit an adventure tour operator when you sustain bodily injuries as a result of the negligence of the Adventure Tour Operator or its employees.  As a result of the incident, you wish to hold the tour operator liable for damages.

In response to your claim for damages, the operator contends that you are contractually bound by the notice displayed at the Adventure Resort. The notice displayed is an example of an unsigned contract where one of the parties tries to impose a term on the other contracting party. An exclusionary term is one that limits one of the contracting party’s liabilities for claims for damages.

This type of clause is advantageous to the contracting party that imposes the exclusion clause in that it can prevent the other contracting party from suing the operator.

When do exclusionary terms on a notice form part of an unsigned contract?

It goes without saying that a consumer that has seen the term agreed to it, there can be no doubt that the term forms part of the unsigned contract. On the other hand, suppose the consumer claims not to have seen the notice. Does this mean that the exclusionary term does not bind the consumer?

The established rule in our law is that the consumer who did not see the term will still be bound by it, as long as the operator imposing the term did what is reasonably necessary to bring the exclusionary term to the consumer’s attention.

To determine whether, in the case of notices, the operator has done everything reasonably necessary to bring a term to a customer’s attention, the following will be considered:

  • The customer must see the notice before he enters into a contract. By way of example, if the operator wants to use a notification to impose a specific exclusionary term, the notice must be visible when the consumer enters the adventure resort.
  • The notice must be clearly visible, and the writing on the notice must be easy to read. A notice hidden out of view would not suffice under the circumstances.

If an operator attempts to impose an exclusionary term and did everything reasonably necessary to bring the term to the attention of the customer, it will be part of the contract.

The interpretation of these types of clauses is set out in the case of Durban’s Water Wonderland (Pty) Ltd vs Botha & Another 1999 (I) SA 982 (SCA). In this case, the claimant and her daughter were on an amusement ride at an amusement park when they were thrown off the machinery and injured.  An investigation found that the accident was as a result of a problem with the park’s machinery.  The claimants sued the park for damages for the injuries they sustained as a result of the incident, claiming that the park was negligent.

The park’s management refused to accept liability because there was an exclusion clause painted on the windows of the ticket office.

The clause read as follows:

“Management are unable to accept liability or responsibility for injury or damage of any nature, whether arising from negligence or any other cause whatsoever, which is suffered by any person who enters the premises and/or uses the amenities provided.

The evidence presented at the hearing of the case revealed that the notices were visible, but the claimants did not see them. The court held that the exclusionary clause was imposed on the contract between the parties because the park had done what was reasonably necessary to bring the term to the attention of its customers.

The notice was prominent and visible at the time that the customer entered into the contract, and as a result, the imposed term was part of the contract. Accordingly, the claimants could not sue the park for the bodily injuries they sustained as a result of the incident.

In considering whether the clause in question exempted the park from liability for negligence, the court makes use of the rules of interpretation which are as follows:

“The correct approach is well established.  If the language of a disclaimer or exemption clause is such that it exempts the proferens from liability in express and unambiguous terms effect must be given to that meaning.  If there is ambiguity, the language must be construed against the proferens.  That being said the alternative meaning upon which reliance is placed to demonstrate the ambiguity must be one to which the language is fairly susceptible; it must not be “fanciful” or “remote”.

This approach has been confirmed by the Supreme Court of Appeal in more recent cases.  It is now generally accepted that such a clause must be interpreted in the usual way, applying the ordinary rules of construction.

An ambiguous exemption clause, however, will be given an interpretation that least favours the party who inserted the clause. Ambiguity may thus be used to minimise the effect of an exemption clause by reducing the range of events covered that may cause loss, or to reduce the exempted legal grounds of responsibility for the damages suffered. In cases of ambiguity, therefore, the court may allow policy considerations to override the intention of at least one of the parties. The court under these circumstances would accept an interpretation unfavourable to the party that inserted the term because the contracting party had the chance to express him or herself more clearly. That being said, the rule is only applied as a last resort when other rules of constructions have failed.

If an exemption clause clearly and unambiguously exempts that party from liability or indemnifies him or her against any loss, the court must give effect to it (even if its consequences are harsh), unless the “provision is so gratuitously harsh and oppressive that public policy could not tolerate it”.

Our courts’ tend to approach exemption and indemnity clauses with circumspection, and will generally try to construe them restrictively. They will respect the clearly stated intention of the parties unless the provisions of the general rule that a contractual term must not conflict with public policy.

If you are a supplier of goods or services that needs to manage its risk or whether you are a victim of the negligence of an institution or its employees feel free to contact Kugen Pillay or Nceba Mafa at Goldberg & de Villiers Inc. Tel. number 041 501 9800.

 

 

 

 

 

YOUR WRITTEN CONTRACT SHOULD COVER EVERYTHING – NO ORAL EVIDENCE ALLOWED!

Here’s another warning from our courts to make sure that all your contracts are properly drawn to reflect both accurately and fully what you have agreed to.

The problem with leaving anything out – or agreeing to something that isn’t then fully recorded in your contract – is a principle in our law known as “the rule of parol evidence”.

A recent SCA (Supreme Court of Appeal) decision illustrates the rule in action, and the facts will resonate with the many farmers, businesses and city dwellers facing empty dams in drought-stricken areas…

The water diviner and the “insufficiently yielding” borehole

  • A fruit farm/wine estate accepted a quote from a contractor to drill a borehole.
  • The contractor, having successfully used his water divining skills and over 20 years’ experience to locate a good drilling spot, quoted to drill on the basis of his standard “No Water, No Pay” policy. The farm accepted the quote with a modification requiring a drill to 70m (or 100m if no water was found at 70).
  • The resultant 76m deep borehole yielded some 4,000 litres of water per hour – something which, as the Court put it, “would put a smile on the face of most farmers in this country”.
  • Nevertheless, and despite the borehole “gaily being used by the [farm] to irrigate its orchards”, the farm refused to pay the drilling contractor a cent, arguing that the water yield was insufficient to meet the contractor’s agreed obligations.
  • One long (and no doubt expensive) legal battle through the courts later, the fight ended up before the SCA.
  • One of the farm’s defences to the claim (and the one relevant to this article) was its (hotly denied) insistence that the contractor had guaranteed a minimum water supply of 10,000 litres per hour.

Oral evidence disallowed – it’s the written contract that counts

  • Bad defence, said the Court. A guarantee of water yield “is not what the agreement says, and to find that there was agreement on such a guarantee would breach the rule of parol evidence which prescribes that where the parties to a contract have reduced their agreement to writing, it becomes the exclusive memorial of the transaction; and no evidence may be led to prove its terms other than the document itself, nor may the contents of the document be contradicted, altered, added to or varied by oral evidence.”
  • On that basis “the considerable volume of evidence led by both sides in regard to their negotiations and what their intention had been was all clearly inadmissible”. All that mattered was that the contract specified that payment was due if the borehole produced water and wasn’t “dry” – its actual yield was irrelevant.
  • The farm also tried to rely on the “partial integration rule” whereby, when a contract is partially written and partially oral, evidence can be led to prove the oral part of the agreement. But, held the Court, that rule cannot be used to “contradict or vary the written portion” of the agreement – which is exactly what the farm was trying to do.
  • End of that argument, so the farm must pay its borehole bill in full, plus legal costs.

The bottom line – make sure your contracts cover everything both clearly and comprehensively!

Before signing any legal document, contact Goldberg & de Villiers Inc for expert legal advice on 041 5019800.

 

Credit: LawDotNews

 

 

MUST YOU PAY TAX ON YOUR RENTAL INCOME?

“Few of us ever test our powers of deduction, except when filling out an income tax form” (Laurence J. Peter of The Peter Principle)

Letting out property can give you an excellent “annuity” income, and if that concept appeals to you and a buy-to-let property comes your way at the right price put an offer in right now; before the current ‘buyer’s market’ runs its course.

In your financial planning however remember the tax implications, because as a landlord you must add your rental income to your salary and other taxable income in your tax return every year. Not to do so is tax evasion, and that carries heavy financial penalties as well as the very real threat of criminal prosecution.

Having to pay tax on your rental income could be make-or-break when it comes to deciding on how much you should pay for a particular property, so do your homework before you put your offer in.

Our tax laws are complex and specialised, so professional advice on your particular circumstances is essential here. These general concepts will however help you in your initial planning –

You must declare all property rental income    

You must declare your gross rental income to the taxman whatever type of accommodation you rent out – whether a whole house or apartment, just a room/garden flat or anything similar – or if you are in the guesthouse/B&B/Airbnb business.

You can claim some expenses, but not all

Your taxable income will be calculated by subtracting allowable deductions from your gross income.

In general, only “expenses incurred in the production of that rental income can be claimed” (SARS). So you can claim things like levies, rates and taxes, bond interest, advertising, agent’s fees, homeowner’s insurance, garden services, electricity and water, repairs and maintenance to the leased area (which would, says SARS, “usually take place when a person attempts to restore an asset to its original condition as a result of damage or deterioration”). Beware the “beginner’s mistake” of thinking that your full bond repayment instalments are deductible – not so, only the interest portion can be claimed and not the capital repayments.

In regard to VAT (per SARS): “The supply of accommodation in a dwelling is an exempt supply for VAT purposes, and consequently you may not deduct VAT incurred on expenses in respect of supplying accommodation in a dwelling.”

And when it comes to renting out only a portion of a property (a room say in the house you live in) you can only claim pro-rata to total floor area. Refer to https://www.sars.gov.za/TaxTypes/PIT/Pages/Examples-for-tax-on-rental-income.aspx  for a practical example from SARS.

Take advice also on claiming depreciation on furniture and the like – your allowable deduction there might be worthwhile.

Not allowed are “expenses that are capital in nature or that are not in the production of rental income” (SARS). So the cost of improvements to the property – which would normally “result in the creation of a better asset” (SARS) – cannot be claimed. Improvements can however be added to the “base cost” of your property – important when you come to pay CGT (Capital Gains Tax) on eventual disposal.

How are you taxed, and what about “ring-fencing”?

Your total taxable income (i.e. including net rental income) will be taxed as per current tax tables.

What if your letting business shows a loss? Per SARS – “should the expenses exceed the rental income, the loss should be available for set-off against other income earned by the individual, provided that the loss is not “ring-fenced” in terms of prevailing anti-avoidance provisions”. In other words SARS could ring-fence your letting business losses to stop you from setting them off against your regular non-rental income. But if that happens you don’t lose those losses, they are just carried forward so that when your letting business starts turning a profit the losses can then be set off against that profit.

Keep an eye also on your obligation to register for and pay provisional tax. As an individual if you earn taxable income of R30,000 p.a. or more in “rental from letting of fixed property” you fall into the net.

Keep full records from Day 1!

Create and maintain a full spreadsheet, with a file of supporting documents, of all income and expenditure (distinguish between revenue and capital, claimable and not claimable). It’s a relatively painless exercise if you update it regularly, but a real challenge if you end up trying to recreate everything only when the annual “income tax return panic” sets in, or when SARS and/or your accountants call for breakdowns and documentation.

Credit: LawDotNews

For more information contact Goldberg & de Villiers Inc on 041 5019800

BEFORE YOU START A NEW SMALL BUSINESS IN 2020 …..

You and your fantastic business idea can’t wait to chuck up the 9 to 5 job and launch your own new venture. 2020 here we come! But is this the right time to do it?

Of course no one knows for sure whether 2020 will see our economy glide happily into recovery mode or continue bumping along in the mud at the bottom. But one of the great things about starting a new small business is that it doesn’t really matter. Provided, that is, that you plan carefully and remain agile and adaptive to whatever may come our way.

Here are some thoughts on how to get that planning underway…

  1. Line up the right professional help – Quite apart from all the many legal, accounting and tax-planning issues you will face, bouncing your ideas off your professional advisers is a no-brainer here. Just do it before you put too much time, effort and money into your new venture.

More on that below…

  1. Ask yourself “Am I an entrepreneur?”- Not everyone is suited to the cut and thrust of running a small business. On one side of the coin you can look forward to a good dose of exhilaration and excitement, but on the other you are in for more than your fair share of work-life balance challenges, risk, fear and stress. The personal and financial rewards can be enormous, but the spectres of disruption, decline and failure will haunt you at every turn (if they ever stop haunting you, something’s wrong – nothing is certain, and nothing lasts forever!).   Bring your family in on this from the very start – they will be walking this road with you every step of the way!
  1. Quiz yourself online –  Spend 10 minutes answering the questions in an online quiz like the Business Development Bank of Canada’s “Entrepreneurial potential self-assessment” on its website – then book appointments with your professional advisers to see if they agree (back to 1 above).
  1. Decide on a business structure upfront – This is critical; the tax, financial, legal and practical issues of getting it wrong can be substantial. And whilst you can change from say sole proprietorship to a company/trust structure down the line, the consequences are best avoided. Rather get it right from the outset with professional advice (1 above again).
  1. Figure out the financing – Whether you will need a lot of money upfront or not, your business idea is a non-starter without finance. First, figure out how much you will need – crowdfunding site Kickstarter has a useful planning checklist on its “Funding” webpage.

Next think about where that money is coming from. Can you finance the startup yourself; and if you can, should you? Will you ask friends and family or a bank for a loan? Perhaps you can find a rich partner or an angel investor? Crowdfunding may be worth a look – apart from Kickstarter and many others like it, consider local platforms – Google “Crowdfunding in South Africa” for a list, and read Jumpstarter’s “Crowdfunding in South Africa!” here. The State also comes to the party here – read “Where do I get assistance to establish a small business?” on the South African Government Information website for a list.

Last but not least, specific professional advice is once again a no-brainer.

  1. Build a strong, dynamic team – Your staff will be the backbone of your business so whether your team will be big or small, in-house or out-sourced, management-heavy or mostly there in a support function, put your heart and soul into choosing wisely. Recruit wherever you can from diverse backgrounds and a range of specialties for a dynamic team that is agile and adaptable, and has the creativity that flows from constant cross-pollination of ideas.
  1. Market, market, market! – No matter how brilliant your product or service, it is worth absolutely nothing to you until your target market pays you for it. Which it will only do if it knows what you do and how you benefit them. As obvious as that sounds a lot of startups fail for lack of planning around how to achieve the necessary exposure.  With all the marketing noise bombarding us all these days you have to find a way to be heard – prioritise marketing or fail.
  1. For a company get cracking with Biz Portal’s ‘One-Day, One-Stop’ online platform – The CIPC (Commission for Intellectual Property Commission) has just launched its “Biz Portal” online business registration platform. In collaboration with SARS, UIF, the Compensation Fund, B-BBEE Commission, the .za Domain Name Authority, and banks, the platform says it will help you register your new company in just 1 day (it normally takes 40!), plus assist with tax registrations, domain names, bank account, BEE certificate and so on. Time will tell how effectively this (very welcome!) new initiative will actually work, but remember that by its very nature it cannot give you that essential individualised input we keep mentioning. Take professional advice as above before using this platform!
  1. The bottom line: Just do it! – To quote Richard Branson: “Screw it – just do it!”

Credit: LawDotNews

For professional legal assistance, give the team at Goldberg & de Villiers Inc a call on 041 5019800.

 

PROPERTY SALES AND TRUSTS – DEMAND PROOF OF TRUSTEE AUTHORITY

  “If you want to make your house easy to sell, make it easy to buy” (Anon)

You are overjoyed at receiving a good offer for your property – not easily achieved in these hard times and of course you certainly don’t want to do anything to jeopardise the sale.

But perhaps do that little bit extra homework before accepting the offer if it comes from a trust. The pitfall here – and it’s one that perennially takes sellers by surprise – is that the trustee/s signing the offer to purchase/sale agreement must have the necessary authority to do so. Drop the ball on that one and you will find yourself without any sale at all.

As a seller learned to its cost recently in the Supreme Court of Appeal (SCA)…

For want of a second signature the seller goes down R3m

  • In 2013 a company sold to a trust for R1.45m a “real right of extension” in a sectional title development (a right in this case to build on common property).
  • An agreement to sell a “real” property right of that type must, as with a standard property sale, be in writing and signed by both seller and buyer (or their authorised agents) to be valid.
  • The seller’s problem here was that only one of the trustees signed the sale agreement. The other trustee refused to sign, and in 2017 the seller found itself trying to convince the High Court to order the trust to pay it the R1.45m plus interest (by then a total just shy of R2m), alternatively to order the trustee who signed the deal to pay up personally in return for taking transfer into his own name.
  • The High Court however pointed out that where a trust has more than one trustee, they must act jointly, and a property sale agreement needs the signatures of all the trustees. One trustee signing alone would be regarded as an agent and would need either general authorisation in the trust deed or written authorisation to sign the particular agreement. Otherwise, as in this case, the signing trustee acted without authority and the sale was void.
  • Defeated in the High Court, the seller appealed to the SCA, abandoning its claim against the trust itself and now trying only to hold the signatory trustee liable in his personal capacity.
  • Its argument was that, despite the invalidity of the sale, the trustee was still liable – in his personal capacity – to pay and take transfer as he was guilty of breaching the clause (standard in property sale agreements involving corporates and trusts) that he “warrants and binds himself in his personal capacity by virtue of his signature hereto … that he is duly authorised to enter into this agreement on behalf of the company, close corporation or trust”.
  • No claim there, held the SCA, commenting that “The ingenuity of this argument is surpassed only by its lack of substance … what [the seller] is essentially seeking is specific performance of a void and invalid contract against the person who signed that contract but was not a party to it – this on the basis that if he’d had the authority to sign, which he had not, the property would have been sold to another. This merely had to be stated to be rejected.” This appeal, said the Court, was doomed to fail.
  • The end result – six years down the line the seller loses its claim (no doubt over the R3m mark including interest by now) and its legal bill will be a hefty one.

Could you sue the trustee personally for damages?

“Theoretically”, said the SCA, the signing trustee could be held liable to the seller for damages flowing from his breach of warranty, and that is of course a strong warning to those signing for trusts and companies – make 100% sure that you have full authority to do so!

But, said the Court, the seller in this case didn’t formulate its claim as a damages claim against the trustee personally and even it had, it would have had to provide evidence as to what damages it had actually suffered.

Indeed proving damages in a case like this is never going to be easy – the seller would have been much better off insisting upfront on proof of the trustee’s authority to sign alone.

Contact Goldberg & de Villiers Inc before you sign any agreement.

(Credit LawDotNews)

MIND THE ‘GAP’ OF LESS THAN ONE YEAR

Did you know that, in terms of Section 84 of the Basic Conditions of Employment Act (BCEA), previous employment with the same employer is taken into account when calculating an employee’s length of service, if the break between the 2 periods is less than 1 year.

This becomes important when an employer determines an employee’s entitlement to leave or any payment to be made in terms of the BCEA.

For more information, contact Tracey Mouton at Goldberg & de Villiers Inc on 041 5019800.

 

WHEN ARE EMPLOYEES ENTITLED TO FAMILY RESPONSIBILITIY LEAVE

The Basic Conditions of Employment Act stipulates that an employee is entitled to Family Leave Responsibility when an employee’s child is born, when an employee’s child is sick, or upon the death of the employee’s spouse/life partner, or the employee’s parent, adoptive parent, grandparent, adopted child, grandchild or sibling.

An employee is only entitled to FRL of 3 days per year. This entitlement would only accrue to employees in the employ of the employer for longer than 4 months and who work for more than 4 days per week.

An employee is entitled to request the employee to submit proof of the event which requires FRL.

FRL does not accrue and as such does not carry over into the next year.

For more information, contact our team of experts at Goldberg & de Villiers Inc on 041 5019800.

NEW ONLINE BUSINESS REGISTRATION PORTAL LAUNCHED

The Minister of Trade and Industry, Ebrahim Patel, attended the launch on the 4th November 2019 of the pilot phase of a new online business registration portal, “Biz Portal”, aimed at enabling entrepreneurs to register a business within a day in South Africa.

For more information follow this link:

https://businesslink.co.za/biz-portal-new-online-business-registration-portal-launched/business/?utm_source=Ricochet+Publishing&utm_campaign=369e2cd360-EMAIL_CAMPAIGN_2019_11_05_09_20&utm_medium=email&utm_term=0_d70cfd1b5e-369e2cd360-45529079

For professional legal advice contact Goldberg & de Villiers Inc on 041 5019800.

“SELLER’S REMORSE” and “SUBJECT TO SALE OF THE BUYER’S PROPERTY”

“If you don’t like where you are, move. You are not a tree” (Jim Rohn)

The upcoming festive season, with its mass migrations of happy holiday-makers to their dream destinations, has always been a busy time for both sellers and buyers.

In these hard times however, an increasing number of sellers are feeling pressured to accept offers well under their expectations, so cases of “seller’s remorse” are much more likely now than they have been for many years. The question is, just how easy or difficult is it for a seller to escape a sale agreement signed in haste?

Equally common no doubt are sales “subject to the sale of the buyer’s property” – for a specified amount and within a specified time period. That raises an important question – must the buyer’s transfer actually be registered in the Deeds Office within the deadline period, or is enough that the buyer has signed a sale agreement for his/her property?

A recent High Court decision addressed both those questions, as well as two others relating to defences raised by a seller who changed her mind shortly after accepting the buyer’s offer (the judgment doesn’t say why she changed her mind, but the fact that a bank offered the buyers a bond of R3.9m suggests that the sale price of R2.6m may have been very low).

A serious case of seller’s remorse, and the 3 defences raised

In the case in question the seller had second thoughts shortly after accepting a R2.6m offer for her house from a couple who were married in community of property. When the seller then refused to pass transfer to the buyers, they asked the High Court to order her to do so.

Any one of the three defences put forward by the seller to the buyer’s claim could have sunk the sale, so let’s have a look at how the Court answered the three main questions they raised –

Does “subject to successful sale of the buyer’s house” require transfer?

The sale was subject to the “successful sale” of the buyers’ property within 60 days, failing which the sale would lapse. The buyers had indeed “sold” their house by entering into a sale agreement for it, and their buyers had taken occupation. But, so the seller argued, that was not a “successful sale” because actual Deeds Office transfer hadn’t been registered within the 60 day period.

Bad defence, ruled the Court, commenting: “I cannot think for a moment that the parties had the intention that the [buyers] were to find a purchaser for the property, that they had to sign a deed of sale after a purchaser was found, that possible suspensive conditions in that deed had to be fulfilled, and that the registration of transfer into the purchaser’s name, all had to take place within the limited period of 60 days only … I therefore find that the phrase ‘successful sale’ in the present agreement means nothing more than the successful signing of a deed of sale” (emphasis added).

On a practical note, both seller and buyer in any property sale should have their attorneys confirm that the “subject to” clause specifies clearly what exactly is required. Is a signed sale agreement enough? Must all suspensive conditions have been met? Or must actual transfer have been registered? Provide enough time for your agreed requirements to be met, and cover scenarios like an unexpected glitch or delay in the buyer’s transfer (neither buyer nor seller wants to be in the position where a buyer can’t pay the purchase price when transfer is eventually tendered).

As a less important side note, the sale in this case was also subject to another suspensive condition. This was a “bond clause” requiring the buyers to obtain a bond within 30 days – which clause, held the Court, had been fulfilled by a bank informing the buyers in writing that their application for a mortgage loan was approved for a total amount of R 3.9m, well over the required R2.6m.

Married in community of property – must both spouses sign?

The buyers being married in community of property, the seller argued that the sale agreement was invalid because only one spouse had signed it. Not so, held the Court, “both husband and wife have equal capacity to perform juristic acts and equal powers to manage the joint estate, which powers can in most cases be exercised without the consent of the other spouse”.

The Court found that this was not a case requiring such written consent (there are conflicting court decisions on this point so ask your attorney for specific advice if this question arises in your sale*), therefore the signing spouse “had full capacity to bind the joint estate by signing the Offer to Purchase without the written consent of the Second Applicant”.

*(Best practice of course is to avoid any possibility of dispute by getting both signatures wherever possible!)

Must acceptance of an offer be communicated to the buyer?

The seller claimed to have called her estate agent 30 minutes after signing the agreement, instructing her to withdraw it and terminating her mandate as agent. Thus, argued the seller, the acceptance of the offer was never validly communicated to the buyer and no contract ever came into existence.

Not so, held the Court. Although our law is that “unless the contrary is established, a contract comes into being when the acceptance of the offer is brought to the notice of the offeror”, no communication of acceptance was necessary in this particular case. The offer was headed “Offer to Purchase (This constitutes an Agreement of Sale upon Acceptance by the Seller)” and it stated that “the Seller agrees to sell the immovable property, together with the improvements thereon, to the Purchaser whom purchases from the Seller on the terms and conditions as set out in this Agreement.”

The unavoidable inference, said the Court, was that the parties intended “that the mode of acceptance would be the signature of the First Respondent, and nothing more.”

“Sign in haste, repent at leisure”

Our law as a general rule holds you to your agreements, so sign a sale agreement and you will have an uphill battle getting out of it.

As always speak to your attorney before you sign anything. Proper advice upfront is the best way to avoid seller’s remorse (and buyer’s remorse for that matter), grey areas that risk dispute and litigation, and uncertainty over whether your rights are properly protected in the sale agreement.

Credit: LawDotNews

For more information, contact Goldberg & de Villiers Inc on 041 5019800.

 

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