Gill Godlonton & Gerrans v Upridge Trading (Private) Limited

On 8 February 2007, the plaintiff requested and received a quotation from the defendant for various grocery items including 17 x 50kg bags of sugar at a total price of $816,000. On 12 February 2007, after banking hours, the plaintiff deposited $7,446,300 into the defendant's bank account, which included $1,488,000 intended as payment for 31 x 50kg bags of sugar. On 13 February 2007, the defendant delivered all items except the sugar. The plaintiff was told the delivery truck was too small to carry the sugar and that it would be delivered later. When delivery was delayed, the plaintiff demanded refund of the purchase price plus interest. The defendant claimed it did not have sugar in stock when payment was made and subsequently offered to source sugar at a higher price, which the plaintiff declined. The plaintiff then sued for delivery of the sugar or alternatively payment of its market value plus interest and costs.

• Whether a contract of sale for the 31 bags of sugar was concluded between the parties
• Whether the provision of a quotation constitutes a binding offer to sell
• Whether payment of the quoted price after receiving a quotation creates a binding contract of sale

Judgment was entered for the plaintiff in the sum of $1,488,000 together with interest thereon at the prescribed rate from 13 February 2007 to date of payment in full. Each party was ordered to bear its own costs.

A quotation provided in response to a price inquiry does not constitute a binding offer to sell, but is merely an exchange of information preparatory to possibly contracting in future. A contract of sale comes into being only when parties make an offer for an agreed merx at an agreed price with the intention to bring about an agreement of sale, not merely to obtain information. The provision of a quotation is analogous to posting prices in a shop and does not bind the seller to supply goods to all who tender the quoted price, especially when the goods are no longer available.

The court observed that it would be ludicrous to compel a seller to go to the market and procure goods for a customer simply because the seller informed the customer of the price of a now-unavailable product. The court also noted that compelling such action would cut across established principles of the law of contract. The court formed an unfavourable impression of the plaintiff's witness Joseph Dlamini, finding him evasive and long-winded in cross-examination, and stated it would only rely on his evidence where corroborated by other reliable testimony. Conversely, the court formed a favourable impression of the defendant's witness Francis Mavakise, finding him direct in his evidence.

This case clarifies important principles of contract formation in South African and Zimbabwean law, particularly regarding the distinction between preparatory negotiations and binding contractual offers. It establishes that quotations are not binding offers but merely invitations to treat or responses to price inquiries. The case reinforces the principle that for a contract of sale to come into existence, there must be a clear offer and acceptance with intention to create legal relations, not merely an exchange of information about pricing.