Case development: Can you revive a failed agreement?

By Steven Stuart-Steer on 25 May 2022

The answer to this question was surprisingly nuanced by the Johannesburg High Court in its judgment for the Compu-Cool Consulting v Silver Dawn Investments 168 CC and Others (unreported) handed down on 3 September 2021. 

It appears from this case that our courts may not accept a simple addendum to a lapsed agreement as being able to validly revive and reinstate a lapsed agreement due to a non-fulfilment of its suspensive conditions.  To be effective, such document needs to contain very specific language to indicate a clear intention that a new agreement is being concluded which incorporates by reference the failed agreement with necessary changes.  

The facts

The parties to the dispute in this case had entered into a written deed of sale for immovable property in terms of which Compu-cool (Pty) Ltd ("Purchaser") would purchase from Silver Dawn Investments 168 CC ("Seller") its rental property located at a key industrial node in Kya Sands en route to Lanseria International Airport.  

The sale agreement became null and void due to the failure to fulfil a suspensive condition that the Purchaser obtain a loan secured by mortgage from a financial institution (e.g. a commercial bank) within not longer than 31 days of signature of the agreement. 

The Seller and Purchaser subsequently entered into a separate agreement to revive the lapsed sale agreement including surgical amendments to remove the unfulfilled suspensive condition to the former sale agreement.  It was common cause that both the lapsed sale agreement as well as the further "revival agreement" complied with the statutory formalities for a disposal of immovable property in terms of section 2(1) of the Alienation of Land Act, 1981. 

Legal issue and decision

The court confirmed the standing position in our law is that a failure of a suspensive condition renders the contract void from the outset.  Accordingly, from a legal perspective the agreement is considered to have never come into existence.  

The key issue which the court faced was whether an agreement that has become null and void, could be validly revived (having never existed from the outset).  

In this particular case,  the parties had annexed the previous sale agreement to the "revival agreement" with language which expressly incorporated the terms of such annexed lapsed agreement into the new agreement with specific limited amendments, including to strike out the failed suspensive condition and providing for new payment provisions. 

After careful scrutiny of the language in the "revival agreement", the court took the view that such agreement should not be viewed as an addendum to the existing agreement, but rather on a proper interpretation should be seen as a new separate agreement concluded essentiality on the same terms contained in the annexed agreement which had been incorporated by reference into the new agreement of sale. 

Further case development 

A similar issue was faced in the Western Cape High Court in the recent judgment of Codevilla v Kennedy-Smith N.O and Others (10268/2020) [2022] ZAWCHC 30 handed down on 4 March 2022.  

The case affirms the same principle as aforesaid that a failed agreement is a nullity from the outset and so cannot simply be revived by means of an addendum but would require a new agreement to be concluded between the contracting parties concerned.   De Wet AJ emphasised that the new agreement would need to eliminate or amend the failed suspensive condition to avoid the new agreement from "self-destructing".  


It appears that a simple revival addendum may not be sufficient as it would be tainted by the invalidity of the lapsed agreement.  If parties wish to revive a failed agreement, they should rather conclude a new agreement on the same conditions as those contained in the lapsed agreement or by incorporating by reference the lapsed agreement with necessary changes.

It seems our courts will scrutinise a revival agreement carefully and so clear language is needed to ensure the correct outcome is achieved, including to either extend the closing deadline or otherwise address the previously failed conditions to ensure the new agreement is not stillborn.  

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