An innocent misrepresentation which results in the parties concluding an agreement they never intended to conclude means that the agreement fails even if there is a clause in the document that the property is sold as is (voetstoots) and that the purchaser has not been induced to enter into the agreement on the basis of any representation.
There was a fundamental error precluding any contract at all.
The property was sold by public auction. As a result of a misunderstanding, there was an innocent misrepresentation on behalf of the seller that the property was one of two units and that the purchaser had the right to veto any proposed subdivision of the other unit. That was not factually correct.
The court held that there was a fundamental mistake as to the nature of the property sold. The seller’s mistake induced the purchaser to buy a property without the veto right. It was never the intention of the parties to sell the property on that basis. The purchaser concluded the agreement on the basis of a genuine error. Because of this mistake, there was no contract at all.
The fact that the contract contained a clause that the purchaser could not rely on any representation made was irrelevant because no contract came into being. It was also irrelevant that the misrepresentation was innocent because it led to a fundamental error precluding any contract at all.
