Crossmoor Transport (Pty) Ltd v Closetrade 200074 CC ta Ilcor Engineering Services [2024] ZAGPJHC 856 (4 September 2024).pdf

Did the agreements between Crossmoor Transport (Pty) Ltd and Closetrade 200074 CC contain suspensive conditions that were not fulfilled, and if so, was there a waiver of those conditions by the Respondent?

Crossmoor Transport (Pty) Ltd (the Appellant) entered into two written agreements with Closetrade 200074 CC, trading as ILCOR Engineering Services (the Respondent), for the manufacture of lowbed trailers: one for two four-axle trailers and another for a five-axle trailer. The agreements included specific clauses regarding payment and financing, particularly stipulating that a deposit of 30% for the four-axle trailers and 50% for the five-axle trailer was payable prior to the commencement of manufacturing if the unit was not financed by a South African financial institution. If financing was obtained from such an institution, a guarantee from that institution was required instead.

The manufacturing of the four-axle trailers was completed, but before delivery, the Appellant failed to pay for them or provide the necessary guarantee, leading to a repudiation of the agreement. The Respondent, in response to this repudiation, halted the manufacturing of the five-axle trailer, which was still in progress, and treated this as a repudiation of that agreement as well.

The Respondent subsequently sued the Appellant for damages resulting from the repudiation of both agreements, including claims for the purchase price of the trailers and storage costs incurred due to the Appellant's failure to fulfill its obligations.

During the trial, the Appellant contended that the agreements were not enforceable because the conditions regarding the payment of deposits and guarantees were not met, arguing that these conditions constituted suspensive conditions that rendered the agreements void. The Respondent countered that the Appellant had waived these conditions by allowing the manufacturing to commence without fulfilling the payment requirements.

The court a quo found that the agreements were indeed subject to suspensive conditions but concluded that the Respondent had waived these conditions through its conduct. The Appellant was held liable for the claims made by the Respondent. Following this, the Appellant sought leave to appeal, which was granted by the Supreme Court of Appeal, leading to the current appeal before the Full Court of the Gauteng Local Division.

The key issues revolved around the interpretation of the agreements, the existence of suspensive conditions, and whether any waiver of those conditions had occurred. The Appellant argued that the agreements were void due to non-fulfillment of the conditions, while the Respondent maintained that the agreements were enforceable and that the Appellant's actions indicated a waiver of any such conditions.

The ratio decidendi of the case revolves around the interpretation of the agreements between the parties, specifically regarding the existence and nature of suspensive conditions. The court concluded that the agreements were indeed subject to suspensive conditions, which required the Appellant to either pay a deposit or provide a guarantee from a financial institution prior to the commencement of manufacturing the trailers.

However, the court found that the Respondent had not waived these conditions, as there was no clear communication or conduct indicating a relinquishment of the right to enforce the conditions. The court emphasized that for a waiver to be effective, it must be communicated to the other party, and the Respondent's actions of demanding payment and following up on the guarantee demonstrated that it did not intend to waive its rights under the agreements.

Ultimately, the core legal principle established is that parties to a contract must adhere to the terms and conditions explicitly stated within that contract, and any waiver of such conditions must be clearly communicated and evidenced by the conduct of the parties involved. In this case, the agreements were deemed unenforceable due to the non-fulfillment of the suspensive conditions, leading to the conclusion that the Appellant was not liable for the claims made by the Respondent.

The case illustrates several general principles of law that are fundamental to contract interpretation and enforcement, particularly in the context of suspensive conditions and waiver. These principles include:

1. Contractual Interpretation: The interpretation of contracts is guided by the intention of the parties as expressed in the language of the agreement. Courts must consider the context, purpose, and factual matrix surrounding the contract to ascertain the meaning of its terms. The language used must be understood in light of ordinary grammatical rules and the overall purpose of the contract.

2. Suspensive Conditions: A suspensive condition is a condition that must be fulfilled before a contract becomes enforceable. The existence of such conditions must be explicitly stated in the contract. If the conditions are not met, the contract may be deemed void or unenforceable. The parties must clearly articulate any suspensive conditions to avoid ambiguity.

3. Waiver of Rights: For a party to waive a right conferred by a contract, there must be a clear and unequivocal intention to do so. Waiver can occur through express communication or through conduct that is inconsistent with the intention to enforce the right. However, mere inaction or failure to assert a right does not automatically constitute a waiver; the intention to waive must be communicated to the other party.

4. Burden of Proof: The party asserting that a waiver has occurred bears the burden of proving that the waiver was made with full knowledge of the rights being waived. This includes demonstrating that the other party was aware of the waiver and accepted it.

5. Enforceability of Contracts: Contracts are enforceable only if the essential terms and conditions are met. If a contract is subject to suspensive conditions that are not fulfilled, the contract may not come into effect, and the parties may not be held liable for non-performance.

6. Conduct of Parties: The conduct of the parties during the performance of the contract can provide insight into their intentions regarding the enforcement of contractual terms. Actions such as demanding payment or following up on obligations can indicate that a party does not intend to waive its rights under the contract.

7. Commercial Context: In commercial agreements, the courts recognise the importance of business efficacy and the need for parties to adhere to their contractual obligations. The interpretation of contracts in a commercial context often considers the practical implications of the agreements and the reasonable expectations of the parties involved.

8. Legal Consequences of Non-Compliance: The failure to comply with the terms of a contract, particularly regarding payment or performance, can lead to claims for damages or other legal remedies. Parties must be diligent in fulfilling their contractual obligations to avoid liability.


In its reasoning process, the court referred to several key case law authorities and legal principles that guided its interpretation of the agreements and the issues of suspensive conditions and waiver. Notable cases cited include:

1. Natal Joint Municipal Pension Fund v Endumeni Municipality [2012] ZASCA 13: This case established the principle that the interpretation of a contract involves attributing meaning to the words used in the document, considering the context, purpose, and circumstances surrounding its creation. The court emphasised that the language of the provision must be read in light of the document as a whole, and that a sensible meaning should be preferred over one that leads to absurd or unbusinesslike results.

2. North East Finance Pty Ltd v Standard Bank of South Africa Ltd [2013] ZASCA 1: This case reiterated the importance of context and purpose in contract interpretation, stating that the court must consider the factual matrix and the intentions of the parties at the time of the contract's formation.

3. Branscombe v Branscombe & Others [2014] ZAGPJHC 118: The court referenced this case to discuss the requirements for establishing a waiver. It highlighted that for a waiver to be effective, there must be a clear intention to abandon a right, which must be communicated to the other party.

4. Trans-Natal Steenkoolkooperasie, Bpk v Lombard [1988] 3 SA 625 (A): This case was cited regarding the necessity of giving notice of a waiver before the expiry of any time limit set for the fulfillment of a condition. The court emphasised that a waiver must be communicated and cannot be assumed from mere inaction.

5. Kliptown Clothing Industries Pty Ltd [1961] 1 A 103 (AD): This case established the contra proferentem rule, which states that if the meaning of a word or clause in a contract is ambiguous, it should be construed against the party that drafted it. This principle was relevant in assessing the clarity of the contractual terms.

The principles of law relied upon by the court included:

- The necessity for clear communication and intention in establishing a waiver of contractual rights.
- The requirement that suspensive conditions must be explicitly stated and fulfilled for a contract to be enforceable.
- The importance of interpreting contracts in light of their context, purpose, and the intentions of the parties involved.
- The application of the contra proferentem rule in cases of ambiguity in contractual terms.