Irrevocable To An Agreement
The High Court dismissed the appeal and upheld the first judgment in favour of the purchaser Van Niekerk. Van Niekerk was entitled to withdraw his offer, even though the offer was described as irrevocable. The word irrevocable does not mean that a party cannot refuse to meet its obligations under the agreement, but that it may be held financially responsible for such a refusal in court. The only exception would be that the terms of the contract expressly stipulate that one or both parties may revoke it in certain situations. Van`s Auctioneers conducted a public auction on behalf of W-E le Roux (Pty) Ltd (W-E) during which Mr. Van Niekerk made an offer and signed a lot 1 sale contract, a property with a building, a bakery and a „butcher shop with refrigerator and freezer“ (the relevant part) for a total amount of R3 million. The terms of sale included a provision that the agreement was an offer to purchase and that van Niekerk was „irrevocably bound“ as a purchaser for a period of 14 days, during which the offer was open to the acceptance of the seller, W-E. In summary, if the High Court imposed an implied obligation on the seller to preserve the Merx (the asset that is the subject of the option and the sale) and to sell the Merx to another, to suffer material harm or to change its base character, the seller will have rejected the option agreement on the grounds that the asset is no longer the same asset that the bidder intended to purchase. The buyer can accept the refusal and revoke the irrevocable offer, as the buyer did in this case.
In principle, an offer can be revoked at any time before the offer is accepted by the bidder. Even an offer described as irrevocable can be revoked in certain circumstances. In particular, if it is an offer to buy and an act or omission by the seller (or its representative), the character of the Merx changes or violates the seller`s implied duty to preserve the Merx. As a result, W-E and Van`s Auctioneers argued that Van Niekerk`s withdrawal from its offer was ineffective, given that the offer was irrevocable and had not yet been accepted and therefore Van Nierkerk was not entitled to withdraw its offer to purchase.