Eldacc (Pty) Ltd v Bidvest Properties (Pty) Ltd

Eldacc (Pty) Ltd leased commercial property to Rennies Distribution Services (Pty) Ltd for ten years. The lease contained clause 35, an option to purchase the property, expressly framed as a stipulatio alteri in favour of Rennies or its nominee, being any subsidiary of the Bidvest Group Ltd in existence at the date of signature. Rennies orally nominated Bidvest Properties (Pty) Ltd as nominee. Within the stipulated period, Bidvest delivered written notice exercising the option. Eldacc refused to proceed with the sale and purported to cancel, arguing that the nomination and acceptance constituted a variation of the lease requiring compliance with a non-variation clause. Bidvest sought specific performance in the South Gauteng High Court, which was granted. Eldacc appealed to the Supreme Court of Appeal.

The appeal was dismissed with costs, including the costs of two counsel.

The case authoritatively clarifies the operation of stipulatio alteri in South African contract law, particularly confirming that acceptance by a third-party beneficiary creates a direct contractual bond with the promisor without requiring cession, substitution, or compliance with non-variation clauses. It reinforces established doctrine on third-party contracts and nomination clauses in commercial agreements.