Negotiating a sale agreement of a home involves a lot of to-ing and fro-ing between a seller and purchaser, as each party’s interests must be addressed as satisfactorily as circumstances allow.
Cooper v Clark
So it was in the sale agreement under consideration in the April judgment in Cooper v Clark. The seller, Clark, received an offer from Cooper in respect of her R 6,3 property. Clark was 99% happy with the offer, although one or two things still bothered her. To make sure the deal is not lost, Clark made two amendments to the offer to make the whole agreement acceptable to her, and then signed it. One amendment had the effect of deleting a clause providing for a building inspector who would, at Cooper’s own costs, make a list of defects in the property by a certain date.
Before Cooper received a copy of the offer as ‘signed and accepted’ by Clark, she paid the deposit. Thus only when she subsequently received a copy, did she become aware of the amendments. She did not agree with these and argued in court that, as a result, no agreement came into operation.
The law and practice
In our law verbal agreements are generally valid and binding on the parties, with certain specific exceptions, property sale agreements being one of them. These agreements must be in writing and signed by the parties to be valid. The reason for this requirement is to reduce the risk of confusion or dispute as to what the buyer and seller have actually agreed.
In practice, a buyer will usually make an initial offer to purchase to the seller, by completing and signing the pre-printed form supplied by the estate agent. This is then presented to the seller via the estate agent. The document (offer) only becomes a valid and binding agreement if the seller accepts the buyer’s offer, as is, by signing it.
Often though, the initial offer sparks negotiation between the parties, usually over price or other important terms, with the result that the document is frequently amended.
It is vital to ensure that any amendment have actually been agreed to by both seller and buyer. If this is not the case, then there clearly was no consensus (meeting of the minds) between the parties, meaning that the prerequisite for concluding a valid agreement is absent. As such, our law generally treats the agreement as void and of no effect whatsoever.
The outcome in the Cooper case
The court upheld Cooper’s argument and ordered Clark to return the deposit. It noted that Clark’s actions constituted a material alteration to the contractual terms (offered by Cooper) and pointed towards a conditional acceptance or counter-offer, requiring Cooper’s further acceptance before an agreement came into existence.
Avoid the trap!
Make sure that any changes to sale documents correctly reflect your agreement, and that both parties sign or initial the changes in confirmation. And as always with property transactions, don’t take any chances – contact an attorney before you put pen to paper.
Have an expert property attorney on your side to make sure your transaction runs smoothly all the way.
Contact Martin Sheard at STBB’s Claremont office on 021 673 4700 or on email@example.com.