Remote Construction Group (Pty) Ltd and Others v Sheridan N.O and Others (11170/09) [2010] ZAKZPHC 93 (28 April 2010)

Remote Construction Group (Pty) Ltd and Others v Sheridan N.O and Others (11170/09) [2010] ZAKZPHC 93 (28 April 2010)

The court found that neither the MOU nor LB4 constituted a valid and enforceable agreement. The MOU was an agreement to agree and was not signed by all necessary parties. LB4, which purported to record the subsidiary terms, was not signed by the fourth respondent and did not include all parties stipulated in the MOU. The option to purchase contained in LB4 was withdrawn before signature, and no acceptance of the offer could follow. Furthermore, the purchase price was not fixed or determinable, failing the common law requirement for certainty in contracts of sale. The option agreement did not comply with the Alienation of Land Act, as it was not signed by all parties and did not specify a...

Citation
[2010] ZAKZPHC 93
Parties
Applicant: Remote Construction Group (Pty) Ltd; Applicant: Rees, David N.O.; Applicant: Rees, Lorna Dianne N.O.; Applicant: Van Dongen, William N.O.; Respondent: Wilson, Brian Robert Sheridan N.O.; Respondent: Squirewood Investments 50 (Pty) Ltd; Respondent: Generation Leisure Ownership (Pty) Ltd; Respondent: June Margaret Wilson N.O.; Respondent: Brian Wilson; Respondent: David Rees
Court
Kwazulu-Natal High Court, Pietermaritzburg
Jurisdiction
South Africa
Judgment Date
28 April 2010
Case Number
11170/09
Procedural Posture
Civil Application / First Instance Judgment
Outcome
Application dismissed with costs, including costs of two counsel.
Judges
Steyn
Legal Topics
Contract Formation, Memorandum of Understanding, Option to Purchase, Alienation of Land Act, Enforceability of Agreements
Commercial and Corporate Civil Procedure Contract Formation Memorandum of Understanding Option to Purchase Alienation of Land Act Enforceability of Agreements

Case Brief

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Parties

Remote Construction Group (Pty) Ltd

Applicant

Rees, David N.O.

Applicant

Rees, Lorna Dianne N.O.

Applicant

Van Dongen, William N.O.

Applicant

Wilson, Brian Robert Sheridan N.O.

Respondent

Squirewood Investments 50 (Pty) Ltd

Respondent

Generation Leisure Ownership (Pty) Ltd

Respondent

June Margaret Wilson N.O.

Respondent

Brian Wilson

Respondent

David Rees

Respondent

Procedural Posture

Civil Application / First Instance Judgment

Legal Issues

  1. 1 Whether the Memorandum of Understanding (MOU) and the subsequent agreement (LB4) constitute a valid and binding contract between the parties.
  2. 2 Whether the option to purchase contained in LB4 is enforceable under the Alienation of Land Act.
  3. 3 Whether the withdrawal of the offer prior to signature precluded the formation of a contract.

Ratio Decidendi

The court found that neither the MOU nor LB4 constituted a valid and enforceable agreement. The MOU was an agreement to agree and was not signed by all necessary parties. LB4, which purported to record the subsidiary terms, was not signed by the fourth respondent and did not include all parties stipulated in the MOU. The option to purchase contained in LB4 was withdrawn before signature, and no acceptance of the offer could follow. Furthermore, the purchase price was not fixed or determinable, failing the common law requirement for certainty in contracts of sale. The option agreement did not comply with the Alienation of Land Act, as it was not signed by all parties and did not specify a...

Court Disposition

Application dismissed with costs, including costs of two counsel.

Orders

  • The application is dismissed with costs, including the costs of two counsel.