Swart v Van Rensburg

The respondents sold immovable property (Erf 451, Garsfontein, Pretoria) to NPS Distributors (Pty) Ltd in terms of a written deed of sale concluded on 11 June 2001. The contract required NPS to furnish a guarantee for the purchase price within 20 days and provided for occupation on 1 September 2001. It contained non-representation and no-warranty clauses, particularly excluding any warranty regarding rezoning or business use, and a cancellation clause entitling the sellers, upon the purchaser’s breach, to cancel and claim R60 000 as agreed pre-estimated damages from the appellant, Mr Swart, in his personal capacity. NPS failed to provide the required guarantee. After notice, the respondents cancelled the contract on 15 October 2001 and claimed payment of R60 000. The appellant resisted liability, raising defences of repudiation by the respondents, an unenforceable or reducible penalty, and invalidity of the contract based on an alleged common assumption regarding rezoning. The magistrates’ court found for the respondents, and the decision was upheld by the Full Bench of the High Court. The appellant appealed to the Supreme Court of Appeal.

The appeal was dismissed with costs, and the order requiring the appellant to pay R60 000 to the respondents was confirmed.

The case clarifies South African law on repudiation, confirming that only conduct evincing a clear and unequivocal intention not to be bound constitutes repudiation. It affirms principles governing agreed damages clauses and the assessment of whether such clauses amount to enforceable pre-estimates of loss. The judgment is also significant for its treatment of common mistake, particularly the limits on third parties invoking alleged common assumptions when the contracting parties themselves treat the agreement as valid.