This blog was co-authored by Hannah Howell, Candidate Attorney.

In October 2024 the Supreme Court of Appeal ruled that an agreement for the purchase of immovable property could not be revived by an addendum to the existing agreement. A new agreement is required subsequent to the lapse of a suspensive condition contained in the agreement. A suspensive condition is a provision in an agreement that delays (suspends) the enforceability of the agreement until a future event (condition) occurs.

The purchasers made an offer to purchase property, subject to a suspensive condition that they had to secure a mortgage bond by a certain date. The purchasers were unable to do so, and the agreement lapsed. An addendum was signed by the purchasers and the seller, amending the financial arrangements and extending the deadline for the provision of a bank guarantee. This was at the beginning of the COVID-19 pandemic. The purchasers subsequently faced financial difficulties and sought to cancel the sale. The appellant at this stage had already paid a substantial portion to the seller on behalf of the purchasers and wanted this money back. She argued that the agreement had lapsed and was not revived by the addendum.

Once an agreement lapses due to the non-fulfilment of a suspensive condition, any subsequent attempt to revive it is legally invalid unless a new agreement is concluded, which can be on the same terms and conditions as the previous agreement. An addendum typically refers to the document that modifies or adds to an existing agreement. The court held that on the evidence, the addendum signed after the lapsing of the suspensive condition did not constitute a new agreement between the parties, and was invalid and unenforceable. Merely signing the addendum did not bring the original agreement back to life or create a new, enforceable contract. Therefore, the addendum was deemed invalid and unenforceable because it failed to meet the necessary requirements to constitute a valid, standalone agreement. The court reaffirmed the position that even where a suspensive condition is inserted solely for the benefit of one party, they may not waive it after the expiry of the time limit for the fulfilment of the condition.

This case highlights the importance of formally and intentionally executing a new agreement once an agreement has lapsed due to the non-fulfilment of a suspensive condition contained therein.

The full judgement can be accessed here:

Maria Luisa Palma Codevilla v Paula Jane Kennedy-Smith NO and Others (SCA) [2024]