Command Protection Services (Gauteng) (Pty) Ltd t/a Maxi Security v South African Post Office Limited

The South African Post Office invited tenders in 2002 for guarding services in six regions. Command Protection Services submitted a tender for all six regions. On 28 July 2003 the Post Office sent a ‘Letter of Appointment’ informing the appellant that it had been awarded the tender, but stating that the appointment was subject to BEE improvement and the successful finalisation and signing of a formal contract. The appellant began providing guarding services in three regions from 1 September 2003 while the parties negotiated several draft contracts, none of which were finalised or signed. On 30 January 2004 the Post Office terminated the relationship, stating that the appointment had been conditional and on a month-to-month basis. The appellant sued for damages, alleging repudiation of a binding contract concluded on 28 July 2003. The Post Office denied that any binding contract on the tender terms had ever come into existence.

The appeal was dismissed with costs, including the costs of two counsel. The High Court’s dismissal of the appellant’s action was upheld.

The case is a leading authority on whether acceptance of a tender creates a binding contract when acceptance is expressed to be ‘subject to’ further conditions or the conclusion of a formal contract. It clarifies the distinction between a binding contract with outstanding details and a mere agreement to negotiate, reinforcing principles of consensus and intention to contract in South African contract law.