The appellant concluded a written contract with the West Coast Trust (WCT), represented by the respondents as trustees, in terms of which he purchased the WCT’s entire right, title and interest in the Sixteen Mile Beach Development Trust for R1 million, which he paid. Before signing the contract, and at the insistence of the first respondent, the appellant furnished a separate written undertaking to a third party in which he undertook to procure the transfer of plots in a proposed township development. The contract contained an ‘entire agreement’ clause stating that it embodied all the terms agreed between the parties. The Development Trust was later sequestrated and its land sold to a third party, rendering performance of the undertaking impossible. The respondents recovered dividends from the insolvent estate but refused to pay these to the appellant, contending that the supervening impossibility of the undertaking terminated the main contract and entitled them to restitution.
The appeal was upheld with costs, including the costs of two counsel. The order of the court a quo was set aside and substituted with an order directing the respondents to pay the appellant R2 481 700.30 plus interest at 15.5% per annum from date of service of summons to date of payment, together with costs of suit.
The case reaffirms the strict effect of entire agreement clauses in South African contract law and underscores that prior or collateral agreements cannot be relied upon where they contradict or add to a written contract. It clarifies that factual inducement is irrelevant where parties have expressly agreed to confine their obligations to a written instrument, and it reinforces the limits of reciprocity and the exceptio non adimpleti contractus.