Nestoras Nestoros v Innscor Africa Limited

The plaintiff was a former director of the defendant company, Mbanje Bird (Pvt) Ltd, which was a subsidiary of Innscor Africa Limited. When Innscor became a public listed company in January 1998, four co-directors of Mbanje Bird were each allotted 4,500,000 shares in Innscor free of charge, while the plaintiff only received 125,000 shares. In August 1998, the plaintiff met with Zenon Koudounaris, Deputy Chairman of Innscor, and Charles Mbanje. According to the plaintiff, Koudounaris verbally promised that the remaining shares would be allotted to him within a five-year period under a Pooling Agreement. The plaintiff subsequently received an additional 500,000 shares and a share option for 250,000 shares. In March 2002, when Innscor entered a joint venture that could not accommodate him, the plaintiff resigned and demanded the remaining 3,625,000 shares (4,500,000 less the 875,000 already received). Innscor refused to allot the shares. The plaintiff instituted action in April/May 2003 claiming transfer of the shares or payment of their market value. At the close of the plaintiff's case, the defendant applied for absolution from the instance.

• Whether the plaintiff's claim was prescribed under the Prescription Act
• Whether there was a binding and enforceable agreement between the parties for the allotment of shares to the plaintiff
• Whether the alleged offer by Koudounaris was sufficiently certain and definite to constitute a valid contractual offer
• Whether the test for absolution from the instance was satisfied

The defendant's application for absolution from the instance was granted. The plaintiff's claim was dismissed with costs.

For a verbal promise or offer to constitute a binding contract, it must be expressed in certain and definite terms. Vagueness or uncertainty in the essential terms of an offer (including what is to be provided, when it is to be provided, and on what terms) is fatal to the existence of a contract. A promise to "sort out" a matter or investigate a claim constitutes at best a statement of intention, not a firm contractual undertaking capable of creating enforceable rights. In prescription matters involving contractual obligations, the debt becomes due and prescription begins to run when the claimant's cause of action crystallizes, which may be when the promised performance is clearly refused rather than when the promise is initially made.

The court noted that in light of its conclusion that no binding contract existed due to uncertainty, it was unnecessary to determine the additional issues raised by counsel regarding: (1) whether Koudounaris had the authority to bind the defendant company to such an undertaking; and (2) the legality of the plaintiff's claim in the context of section 75 of the Companies Act. The court also observed that the plaintiff's case was characterized by significant inconsistencies between his pleadings and his oral testimony, and that company registration records were acknowledged to be haphazard and inaccurate in this instance.

This case illustrates the strict requirements for certainty and definiteness in contractual formation under Zimbabwean/South African common law. It demonstrates that verbal promises, particularly those made by company officers, must contain sufficiently clear and certain terms to constitute binding contractual offers. The case serves as authority for distinguishing between statements of intention or promises to negotiate versus enforceable contractual undertakings. It also clarifies the approach to prescription in contractual claims, holding that the prescriptive period begins when the cause of action crystallizes (when it becomes clear the promise will not be performed) rather than when the promise is made.