Pillay v Shaik and Others

The first to sixth respondents (the developers) marketed interests in a sectional title development (Lazy Lizard) through the sale of members’ interests in close corporations owning the units. The appellants, Pillay and Motlanthe, each signed standard-form agreements offering to purchase members’ interests in two such close corporations and paid substantial deposits into the developers’ attorneys’ trust account. Although the developers never signed the agreements, their conduct over an extended period—accepting deposits, issuing confirmations, requesting guarantees, allocating units and close corporations, and treating the appellants as purchasers—indicated acceptance. Later, the developers repudiated the transactions, asserting that no binding agreements existed because they had not signed the contracts.

The appeal was upheld with costs. The order of the Full Bench was set aside and replaced with an order substantially restoring the High Court’s decision, declaring the sale agreements valid and binding, directing the sellers to perform in terms thereof, and providing coercive and remedial measures in the event of non-compliance.

The case is a leading authority on the application of the doctrine of quasi-mutual assent in South African contract law and clarifies that the sale of a member’s interest in a close corporation owning immovable property is not subject to the Alienation of Land Act. It underscores that parties may be bound by their conduct notwithstanding the absence of formal signatures.