Dealing with a serious case of seller's remorse and three defences raised

While rare, there are instances of seller's remorse such as a case dealt with by the High Court where the seller had second thoughts shortly after accepting a R2.6m offer and then refused to pass transfer. The buyers approached the Court to order her to do so and the seller put forward three defences which could well have sunk the sale, but were dealt with by the Court as follows:

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. While the buyers had "sold" their house by entering into a sale agreement, their buyers had taken occupation and the "bond clause" was fulfilled, transfer of ownership had not yet taken place in the Deeds Office. Hence, the seller argued that a "successful sale" had not taken place.

The Court held that "successful sale" amounted to nothing more than the successful signing of a deed of sale and that it was unthinkable that the parties intended for full transfer within a limited 60-day period as the buyer had to find a purchaser with possible suspensive conditions to be fulfilled before transfer could take place.

That said, it is recommended that you always check with your attorney that any "subject to" clause specifies clearly what exactly would be required especially in scenarios such as an unexpected glitch or delay in the buyer's transfer (when not able to pay the purchase price on transfer for example).

Married in community of property - must both spouses sign?

Since the buyers are married in community of property, the seller argued that the agreement was invalid as only one spouse had signed it. The Court held that husband and wife have equal capacity to perform juristic acts and equal powers to manage their joint estate and these powers can in most cases be exercised without the consent of the other such as in this case. There are however conflicting court decisions on this point and it's best to check with your attorney and get both signatures wherever possible to avoid any possibility of dispute.

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, hence acceptance of the offer was never validly communicated to the buyer and no contract came into existence.

The Court held that while the law generally requires that the offeror is notified for a contract to be valid, this this particular agreement was an exception. It found that as an "Offer to Purchase" which constitutes an agreement of sale upon acceptance by the seller the unavoidable inference was that the parties intended "that the mode of acceptance would be the signature of the First Respondent (the Seller), and nothing more."

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