Many property practitioners rely on standard or pre-populated agreements of sale to streamline transactions. However, the 2022 judgment in City of Johannesburg v Pitse NO serves as an important reminder that every agreement must be read, understood and tailored to the specific transaction.
In this matter, the purchaser signed an agreement requiring construction on the property to commence within one year of signing the sale agreement—not transfer. When the purchaser failed to comply, the Seller cancelled the sale. The Purchaser argued that transfer should have taken place first, but the court rejected this argument, holding that the parties were bound by the clear wording of the contract.
For property practitioners, the lesson is clear: never assume that standard clauses are appropriate simply because they appear in a template. Pre-populated agreements often contain obligations, deadlines or special conditions that may not suit a particular transaction. If these provisions are overlooked or misunderstood, they can expose buyers, sellers and even property practitioners to unnecessary disputes and financial loss.
Before presenting an agreement for signature, agents should ensure that all standard clauses are relevant, remove inapplicable provisions, and draw their clients’ attention to any unusual obligations. A carefully considered agreement remains one of the best ways to reduce risk and avoid costly litigation.
