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ARTICLE · 07 FEBRUARY 2020

Is A Term Undertaking To Agree Legally Enforceable?

In some agreements, most specifically lease agreement (as in a case in point) terms are usually included which state that specific terms shall be negotiated and agreed to between the parties

South AfricaReal Estate and Construction

In some agreements, most specifically lease agreement (as in a case in point) terms are usually included which state that specific terms shall be negotiated and agreed to between the parties (at a later stage). The question that the Supreme Court Appeal was faced with was whether the specific performance of such a term (to agree) is possible and if so, whether tacit terms flowing from there are similarly enforceable?

Shepherd Real Estate Investments (Pty) Ltd v Roux Le Roux Motors CC (1318/2018) [2019] ZASCA 178

The facts of the case and issues are briefly as follows:

The agreement was concluded on 7 November 2007 between Shepherd Industrial Commercial Real Estate CC (Shepherd Industrial) and the respondent, Roux Le Roux Motors CC, pursuant to which, the former let to the latter, a commercial property situated at the corner of Jan van Riebeek Drive and Wamkelekile Street, Paarl (the property) for the purpose of conducting the business of a petrol station.

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