28 Feb

Accepting offers after they have lapsed

It happens every now and again that offers are accepted after the deadline to do so, has expired. Naturally the resultant reaction by everyone is “what do we do now??! Is this a valid sale or is it void? Or is it, maybe voidable?”

The simple reality of the matter is that there is (at least to my knowledge) only one reported judgment in our country’s history which actually specifically deals with this scenario, that of Manna v Lotter, which judgment was handed down in March 2007 already in the Western Cape High Court.

In essence what happened here, was that the offer only arrived at the seller’s desk some 3 or 4 days after it had already expired. Nonetheless, the seller accepted the offer and returned it to the agent, who sent it to attorneys for further action. No one noticed that the expiry date had already lapsed well and truly, by the time it had been accepted. The buyer paid his costs; signed the transfer documents and did all that was required of him. The seller however then went silent and only after the buyer started to make some significant noise, did the seller suddenly turn around to say that in her opinion the sale was void as it was accepted out of time!

One may be tempted to argue that by accepting the offer out of time, it amounts to a “counter offer” of sorts – and if that were true, then it would have to follow that the buyer would have to somehow accept this in writing to comply with the Alienation of Land Act’s requirements. The judge in this matter however, saw things differently. He held that this clause is one that is there, solely for the benefit of the buyer – much like a bond clause – and that as such, it was for the buyer to decide whether to waive the benefit of that clause. The judge then reasoned further that this being the case, when a seller accepts an offer “out of time”, it does not amount to a counter offer. The formalities of the Alienation of Land Act are all still perfectly intact – the sale agreement is in writing; it is signed and it identifies the property and selling price. According to the Judge, all that remained is for the buyer, once he becomes aware of the late acceptance, to then, and within a reasonable time, waive the deadline he had imposed for his benefit. And once he does, the sale agreement becomes final and binding.

As such, and should you find yourself in this predicament that an offer was accepted out of time, all one needs to do to ensure that the sale is indeed safe, is to obtain something from the buyer ASAP and in writing wherein he / she states that he / she waives the benefit of that clause and is still prepared to proceed with the sale agreement and then communicate this to the seller ASAP too!

Robert Krautkrämer