Mike Ness Agencies CC t/a Promech Boreholes v Lourensford Fruit Company (Pty) Ltd

The appellant, a borehole drilling contractor, provided a written quotation to the respondent to drill a borehole on its farm. The quotation included a 'no water, no pay' policy and guaranteed water within 70 metres, with further drilling to 100 metres free of charge if no water was found at 70 metres. The quotation was accepted in writing. The appellant drilled the borehole, struck water, and the borehole ultimately yielded approximately 4 000 litres per hour. The respondent installed a pump and used the water but refused to pay, alleging that the borehole did not yield 'sufficient water' as allegedly agreed orally, contending a minimum yield of 10 000 litres per hour. The appellant sued for payment and succeeded in the magistrates’ court. The High Court overturned that decision, prompting an appeal to the Supreme Court of Appeal.

The appeal was upheld with costs. The High Court order was set aside and replaced with an order dismissing the appeal to that court with costs, thereby restoring the magistrates’ court judgment in favour of the appellant.

The case reaffirms the strict application of the parol evidence rule in South African contract law and clarifies that courts must interpret contracts based on their written terms. It underscores that a 'no water, no pay' clause does not imply a guarantee of a specific yield unless expressly stated, and confirms that interpretation of contracts is a matter of law for the court.