Cladall Roofing (Pty) Ltd v SS Profiling (Pty) Ltd

Cladall Roofing (Pty) Ltd, a roofing contractor in the Eastern Cape, ordered 13,000 square metres of galvanised IBR roof sheeting from SS Profiling (Pty) Ltd with precise specifications: 0.5mm thickness, full hard (FH) industrial strength, Z275 galvanisation, and manufactured according to Mittal/ISCOR standards. These specifications were critical as Cladall had tendered to install roofing at a cooling facility in Addo, which required trafficable roofing due to widely-spaced roof trusses. SS delivered IBR sheeting, but for the purposes of the separated issues agreed between the parties, it was accepted that the bulk of the material delivered did not comply with any of the required specifications - it was not the required thickness, not full hard, not galvanised to Z275 specification, and not manufactured to Mittal standards. Despite initial assurances from SS representatives that the correct material had been delivered, within two weeks of installation the roof showed indentations when walked on. Cladall withheld the balance of the purchase price (R254,396.96) and instituted action for damages. SS defended the action and counterclaimed for the balance, relying on standard conditions of agreement that had formed part of the credit application and were attached to delivery notes.

• Whether a seller can rely on standard contractual conditions (particularly clauses 6.4, 7.3, and 11.1) as a defence to a claim for damages where the goods delivered bear no resemblance to the goods ordered and there is no performance at all in terms of the contract
• Whether the delivery of goods that do not meet any of the contractual specifications constitutes performance of the contract or amounts to delivery of an entirely different product
• Whether a purchaser is entitled to withhold payment for goods where there has been no performance at all in terms of the contract
• Whether the doctrine of estoppel applies in the circumstances

1. The appeal was upheld with costs. 2. The order of the court below was set aside and substituted with an order that: (i) the defendant is not entitled to rely on the special conditions as valid defences against the plaintiff's claim for damages; (ii) the plaintiff is entitled to withhold payment for the goods delivered on the pleadings as they stand; (iii) the remaining issues in dispute on the pleadings are to be determined at a further hearing; and (iv) costs are to be costs in the cause.

Standard contractual conditions dealing with defective goods, inspection, and notice requirements only apply to situations where defective goods are delivered in terms of a contract. They do not apply where the goods delivered are an entirely different product that bears no resemblance to what was agreed between the parties. Where none of the minimum threshold requirements and specific attributes agreed upon between the parties have been met, there is no performance at all in terms of the contract (as opposed to defective performance). In such circumstances, the seller cannot rely on contractual clauses designed to deal with defects or variations as a defence to a claim for damages, and the purchaser is entitled to withhold payment. A contract for the sale of goods with specific specifications can only be performed by delivering goods meeting those specifications, not by delivering goods of the same generic type but lacking all the required attributes.

The Court noted that although SS relied on clause 5.4 of the standard conditions in its plea (which gives the right to deliver alternative goods in certain circumstances), SS did not lead any evidence in this regard and the clause could not take the matter any further. The Court also observed that the specifications were clearly of critical importance to Cladall given the nature of the project (a cooling facility requiring trafficable roofing due to widely-spaced trusses). The Court's judgment implicitly recognizes that in commercial contracts, parties rely on specific technical specifications for good reason, and failure to meet these specifications cannot be treated merely as a defect when none of the essential requirements are met.

This case is significant in South African contract law as it clarifies the distinction between defective performance and non-performance of a contract. It establishes that standard contractual clauses dealing with defective goods, inspection requirements, and notice periods do not apply where there has been no performance at all - i.e., where the goods delivered are fundamentally different from what was contracted for and bear no resemblance to the agreed specifications. The case reinforces the principle that parties cannot rely on contractual defences designed to deal with defects or variations in goods when they have delivered an entirely different product. It also confirms that a purchaser may withhold payment where there has been complete non-performance rather than merely defective performance. The case is particularly relevant to commercial transactions involving goods with specific technical specifications and demonstrates the courts' willingness to look at the substance of performance rather than accepting that delivery of goods nominally within the same category constitutes performance.