Sheterayi Sevy Runatsa v Rumani Estates (Private) Limited & Others

On October 30, 2007, the first respondent (Rumani Estates) and the appellant (Runatsa) signed an Agreement of Sale for a piece of land at a purchase price of Z$2,800,000,000. The agreement provided that: (1) the effective date would be the date of payment of the deposit; (2) the purchase price was payable upon signing the agreement; (3) the seller would tender transfer within 14 working days of payment to Africa Real Estate (the seller's agents); and (4) no amendment would be valid unless reduced to writing and signed by both parties before two witnesses. After signing, the appellant could not pay the purchase price on October 30, 2007 as required. She approached Allen Manyunga, an estate agent employed by Floburg Real Estate who had negotiated the sale, and proposed payment in two instalments to Floburg. Allen accepted and provided Floburg's bank account details. The appellant paid Z$1,200,000,000 on November 9, 2007 and Z$1,600,000,000 on November 20, 2007 to Floburg's account. Subsequently, Floburg telephoned the appellant to advise that the agreement had been cancelled due to her failure to pay according to the agreement terms. The first respondent confirmed cancellation and advised the property had been sold to the third respondent. The appellant filed a court application seeking specific performance, which was dismissed by the High Court.

• Whether the condition precedent for the agreement to come into operation was fulfilled when payment was made to a different agent, in instalments, and after the stipulated date
• Whether the condition precedent had to be fulfilled in forma specifica (in the exact manner stated) or per aequipollens (in some equivalent manner)
• Whether an estate agent had authority to amend the terms of a sale agreement concluded between a seller and purchaser
• Whether the agreement came into operation despite non-compliance with its express payment terms

The appeal was dismissed with costs.

The binding legal principles established are: (1) Where a contract contains a suspensive condition (condition precedent) expressed in plain language, the condition must be fulfilled in forma specifica (in the exact manner stated) before the contract comes into operation, unless the parties' expressed intention indicates otherwise; (2) An estate agent, in the ordinary course of business, does not have authority to conclude a sale agreement on behalf of a prospective seller or to amend an agreement already concluded between seller and purchaser, unless specifically instructed by the principal to do so; (3) Where a contract contains a non-variation clause requiring amendments to be in writing and signed by the parties (particularly before witnesses), any purported oral or informal amendment will be invalid and unenforceable; (4) Payment made to an unauthorized agent, in a different manner than specified, and at a different time than required by a contract, does not constitute fulfillment of a condition precedent relating to payment, and therefore the contract does not come into operation.

The Court made an observation regarding clause 2 of the agreement, noting that although it refers to 'payment of the deposit', it must be accepted that the parties meant 'payment of the purchase price' because clause 3 does not mention payment of a deposit but simply states the purchase price is payable upon signing. The Court also noted that the rule of interpretation requiring focus on the language used in the contract (rather than unexpressed intention) should 'if anything, be more strictly adhered to' in regard to suspensive conditions than in regard to other contractual terms, given the nature and function of suspensive conditions. The Court observed that even if it were true that Allen authorized the payment arrangement, this would not bind the first respondent, suggesting some doubt about whether such authorization actually occurred but finding it unnecessary to decide this factual issue given the legal principles applicable.

This case is significant in Zimbabwean contract and property law for several reasons: (1) It clarifies the strict interpretation of suspensive conditions (conditions precedent) in contracts, particularly that where language is plain, such conditions must generally be fulfilled in forma specifica rather than per aequipollens; (2) It reinforces the principle that non-variation clauses (such as clause 14 requiring written amendments signed before witnesses) will be strictly enforced; (3) It defines the limited scope of an estate agent's authority, establishing that estate agents do not ordinarily have power to conclude sales or amend sale agreements on behalf of sellers unless specifically authorized to do so; (4) It demonstrates the application of the principle from Frumer v Maitland regarding interpretation of contracts, particularly suspensive conditions, focusing on what the language means rather than unexpressed intention; and (5) It emphasizes that where parties have set out their entire agreement in writing with specific performance terms, substantial compliance or payment to unauthorized parties will not satisfy contractual obligations.