Oos Vrystaat Kaap Bedryf Beperk v Van Aswegen

OVK, a farmers' co-operative operating in the Free State, conducted business purchasing and selling grain. On 26 October 2000, Van Aswegen's husband signed a standard form document at OVK's Excelsior store purporting to sell 500 metric tons of maize at R580 per ton on her behalf. The document was delivered to OVK's head office in Ladybrand. On 9 November 2000, within 14 days, OVK signed the document through its grain division head. The document contained clause 21 which provided that the agreement would only take effect upon signature by both parties, and that the purchaser must sign within 14 days of the seller's signature, failing which neither party would be bound. A day or two after signing, Van Aswegen's husband contacted an OVK employee to inform him that she was no longer willing to sell the maize. The maize price had started rising after signature, and Van Aswegen became concerned the stipulated price was a bad bargain. When the delivery date (31 August 2001) passed without delivery, OVK sued for damages of R180,500. Van Aswegen denied a binding agreement existed, arguing her husband lacked authority and that the offer had been revoked before acceptance.

• Whether clause 21 in the document constituted an irrevocable offer to sell maize for 14 days, or merely provided that the offer could be accepted within 14 days but remained revocable during that period
• Whether there was proper written authorization for Van Aswegen's husband to sign on her behalf
• Whether Van Aswegen's husband had actual authority to bind her
• Whether the offer was validly revoked before acceptance by OVK

The appeal was dismissed with costs. Van Aswegen was not entitled to costs of two counsel as the case turned on a narrow issue of no complexity.

A clause in a contract providing that an offer must be accepted within a specified time period (in this case 14 days) does not, without express provision or necessary implication, constitute an irrevocable offer for that period. The ordinary common law principle applies: an offer may be revoked at any time before acceptance unless the offeror has expressly or impliedly bound himself not to revoke the offer during the specified period. For a time-limited offer to be irrevocable, the clause must clearly state or necessarily imply that the seller is bound not to withdraw the offer within that period. The purpose of a time limitation clause may simply be to provide the offeree with a reasonable period within which to accept, rather than to bind the offeror.

The court noted but did not decide the academic question discussed in Christie's Law of Contract (4th ed, pp 58-59) and by the trial court about whether a unilateral declaration of irrevocability must be accepted before it becomes binding. Navsa JA stated it was not necessary to explore this matter as the first issue (whether clause 21 constituted an irrevocable offer at all) was determinative of the appeal. The trial court had expressed a contrary view to Professor Christie on this point, but the SCA left the question open. The court also noted that Van der Merwe J had correctly found that the requirement for written authorization could be waived by OVK as it was inserted for OVK's benefit, and had correctly drawn adverse inferences from the evidence regarding Van Aswegen's credibility and her husband's failure to testify on the authority issue.

This case is significant in South African contract law as it clarifies the distinction between a time period for acceptance of an offer and an irrevocable offer. It confirms the general principle that an offer is revocable at any time before acceptance unless there is an express or implied undertaking not to revoke. The judgment emphasizes that clauses specifying a time period for acceptance do not, without more, create an obligation on the offeror not to withdraw the offer during that period. The case provides important guidance on the interpretation of standard form agricultural contracts and commercial practice in the grain trading industry. It reinforces the principle that clear, unambiguous language is required to create an irrevocable offer, departing from the ordinary common law rule of revocability.