Introduction The Supreme Court of Appeal ruled that a contract which is subject to a suspensive condition cannot be revived once the suspensive condition has lapsed. In the case of Vantage Goldfields SA (Pty) Ltd v Siyakhula Sonke Empowerment Corporation (Pty) Ltd and Another (853/2-23) [2025] ZASCA 01 (9 January 2025) the court found that extending the deadline for the fulfilling of the suspensive condition is legally incompetent. A contract which is subject to a suspensive condition suspends the operation of the obligations flowing from the contract until the suspensive condition is fulfilled or waived. If the condition is not fulfilled or waived by a specific date stated in the contract, the contract lapses and becomes unenforceable. The court declared that the principal agreement and subsequent addendas were void and of no force and effect. Facts Vantage Goldfields SA (PTY) Ltd (Goldfields) and Flaming Silver Trading 373 (Pty) Ltd (Flaming Silver) entered into a sale of shares agreement (the principal agreement) on 1 November 2017 for R310M (the purchase price) subject to the fulfilment of certain ‘conditions precedent’ (“CP”) as set out in sub-clauses 3.1.1, 3.1.2 and 3.1.3. These clauses were to be fulfilled by Flaming Silver as follows:
The agreement also specifically provided that should the conditions precedent 3.1.1 not be fulfilled by 31 January 2018 or any other conditions precedent be extended in writing, the agreement shall lapse and be of no force and effect.
The parties attempted to reach numerous addenda after the deadlines had expired by extending the due dates and deeming the conditions fulfilled. Under one of the addenda Siyakhula Sonke Empowerment Corporation (Pty) Ltd (Siyakhula) intervened and deposited R1M as a non-refundable pre-payment of the purchase price which was not subject to any conditions precedent except for the delivery of the Section 11 application. DisputeThe dispute revolved around a sale of shares agreement. The primary issue was the non-fulfilment of suspensive conditions in the agreement, and when the conditions were not met by the due dates, it led to its automatic lapsing. The Court’s findings The Supreme Court of Appeal found that the principal agreement lapsed on 1st or 2nd January 2018, due to the non-fulfilment of the payment condition. The court determined that the later addenda could not revive the lapsed agreement because the parties failed to extend the payment condition in writing before the due date and that clause 3.2 of the principal agreement, which prompted the automatic lapsing, remained intact and prohibited retrospective extensions. The addenda ‘self-destructed’ when the consent condition was not met by its extended dates, even though they appeared to have an intention of reviving the principal agreement. Additionally, the court ruled that Siyakhula's payment was recoverable on the grounds of unjust enrichment because it was connected to the void and lapsed principal agreement.
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