De Swardt v The House of Trucks (Edms) Bpk

Mrs Daleen de Swardt, through her husband acting as her agent, concluded an oral contract with The House of Trucks for the manufacture of two sets of fuel tankers for her business. The agreement was concluded telephonically in February 2001 at an agreed price, with delivery dates and a one-year guarantee. Financing was arranged through Planet Finance, which purchased the tankers from the respondent and leased them to the appellant. After delivery, the tankers manifested defects and were allegedly unfit for use. Despite attempts to repair them, the defects persisted, leading the appellant to cancel both the manufacturing contract and the lease agreement, and to return the tankers. The appellant sued for consequential damages arising from breach of the guarantee.

The appeal was upheld with costs. The order of the court a quo was replaced with a declaration that a contract existed between the parties, that the tankers were guaranteed for a year, and that the appellant is entitled to claim any damages flowing from breach of the guarantee.

The case affirms that oral contracts for manufacture are enforceable in South African law, even where financing structures involve third parties. It clarifies that a contractual guarantee may entitle an aggrieved party to claim ordinary damages, including loss of profits, without the need to prove special damages or foreseeability.