Cessions in security, parate executie, and carrying out unenforceable contracts

In a choice including a sophisticated set of realities which are not pertinent here, the Supreme Court of Appeal advised us of particular legal concepts connecting to parate executie (instant execution) and the efficiency of agreements which the law states have no force.

When a property (in this case loan account claims) is delivered in securitatem debiti (as security), the concept of parate executie (instant execution) allows the cessionary (the recipient of the security), upon the cedent’s default, to understand the cedent’s promised home without following any judicial treatment. In this case the bank, which had prior to exercising its rights of instant execution, recommended the other celebration of its objective to do so and provided a chance to make a deal to prevent that effect. That is constantly a great concept. This is among the couple of circumstances in law where self-help is allowed.

The other fascinating feature of this judgment is the rejection of an argument by the appellant that a contract in between the bank which exercised its instant execution rights and the buyer of the promised home did not exist due to the fact that of non-fulfilment of a resolutive condition. The court estimated from a 1913 Appellate Department judgment which stated: “It by no methods follows that due to the fact that a court can not implement an agreement which the law states has no force, it would for that reason be bound to disturb the outcome of such an agreement which the celebrations had actually executed according to its terms. Expect, for instance, an … [oral] arrangement of sale of repaired home …, a payment of the purchase cost and due transfer of the land. Neither celebration would have the ability to disturb the concluded deal on the simple premises … that it remained in truth a contract to offer, void and unenforceable in law.”

It is closed to a complete stranger to a contract that has actually been executed according to its terms by the contracting celebrations to challenge the already-performed deal.

Vantage Goldfields SA (Pty) Ltd & & Another v Arqomanzi (Pty) Ltd and Others (733/2022) [2023] ZASCA 106 (27 June 2023) (saflii.org)

Like this post? Please share to your friends:
Leave a Reply

;-) :| :x :twisted: :smile: :shock: :sad: :roll: :razz: :oops: :o :mrgreen: :lol: :idea: :grin: :evil: :cry: :cool: :arrow: :???: :?: :!: