ABSA Bank Limited v Rosenberg and Another

ABSA Bank provided credit facilities to Uwoyela Environmental Services (Pty) Ltd (UES). When UES sought a substantial increase of its facility, ABSA required personal guarantees from Marc and Terrence Rosenberg. The respondents signed a guarantee in August 2019; ABSA countersigned only in March 2020, at a time when it had already decided not to increase the facility because conditions precedent were not met. UES later defaulted on its existing indebtedness. ABSA demanded payment from the respondents under the guarantee. The respondents refused, contending that the guarantee was conditional upon ABSA granting the increased facility, which never occurred.

The appeal was dismissed with costs.

The case reaffirms South African principles of contractual interpretation, particularly in commercial guarantees, stressing that guarantees may be unenforceable where they are contextually and reciprocally linked to obligations that were never performed. It underscores that banks cannot rely solely on wide wording in guarantees when the broader contractual matrix shows conditionality.