Be Bop a Lula Manufacturing & Printing CC v Kingtex Marketing (Pty) Ltd

The appellant ordered 60 000 T‑shirts from the respondent. Only 40 000 were delivered, allegedly late and with quality defects, causing losses to the appellant in its resale contract with Adidas. After partial payments, a balance of R229 846.07 remained. The appellant disputed this amount and sent the respondent a cheque for R107 196.89, marked "full and final settlement of account", accompanied by a detailed credit request and reconciliation explaining deductions claimed for defects, repairs and losses. The respondent deposited the cheque, which was paid, but through its attorneys purported to reject the compromise and retained the proceeds in its attorneys’ trust account, later appropriating them to legal fees. The respondent nevertheless sued for the full outstanding balance. The appellant raised compromise as a defence.

The appeal was upheld with costs. The orders of the High Court and the full court were set aside and replaced with an order dismissing the respondent’s claim with costs.

The case is a leading authority in South African contract law on compromise and accord and satisfaction. It clarifies that depositing and retaining a cheque tendered in full and final settlement generally constitutes acceptance of a compromise, and that a creditor cannot avoid compromise by attempting to reject it after retaining the proceeds. The judgment reinforces objective principles of offer and acceptance and commercial certainty.