Africa Solar (Pty) Ltd v Divwatt (Pty) Ltd

Africa Solar (Pty) Ltd manufactured and supplied photovoltaic solar panels to Divwatt (Pty) Ltd, which used them in solar-powered water pump installations. Divwatt withheld part of the purchase price after complaints from its customers that the panels underperformed relative to the specifications provided by Africa Solar. Africa Solar sued for the outstanding balance. Divwatt defended and counterclaimed, alleging defective performance. A central dispute was whether Africa Solar’s standard terms of trade—purporting to limit remedies and exclude withholding of payment—were incorporated into the contract via a credit application form signed by Divwatt’s director, Mr Pichulik, who contended that only the front page was faxed to him and that he never saw or agreed to the reverse-side standard terms.

The appeal was dismissed. It was confirmed that Africa Solar’s standard terms of trade did not apply, and Divwatt was entitled to rely on the exceptio non adimpleti contractus and to pursue its counterclaim.

The case is important for South African contract law on the incorporation of standard terms. It confirms that standard terms are not binding unless properly communicated and assented to, and that a party cannot rely on unseen reverse-side conditions where the circumstances show no consensus. It also affirms the continued relevance of the exceptio non adimpleti contractus in contracts of sale.