In practice, the terms “Offer to Purchase” and “Deed of Sale” are often used interchangeably, but there is a slight difference. When a Purchaser/Buyer makes a written, signed offer to a Seller to purchase the Seller’s property that document is called an “Offer to Purchase” (“the Offer”). The Offer will usually have a time period (expiry date) within which the Seller can accept the Offer made by the Purchaser. The inclusion of an expiry date in the Offer is to ensure that the Offer does not stay open for acceptance by the Seller for a prolonged period of time to the Purchaser’s detriment. Where, however, no expiry date is mentioned in the Offer, it must be accepted by the Seller within a reasonable period of time. The Seller accepts the Offer by signing it. Once the Seller signs the Offer, that document becomes a contract called a “Deed of Sale”/“Agreement of Sale”. If the Seller on the other hand rejects the Offer, the document will simply fall away and will be of no force and effect.

Question: What happens if the Seller accepts an Offer after the expiry date? Will the Deed of Sale/Agreement of Sale be valid, or will it be invalid and unenforceable?

This situation was considered in the case of Manna v Lotter and another 2007 (4) SA 315 where the Offer in question contained an expiry date clause which read as follows:

“This offer is irrevocable and expires at noon on the 8^th of November 2003 and on acceptance shall become a binding Agreement of Sale irrespective whether the Purchaser has been notified of such acceptance or not.”

The Offer was accepted by the Seller four days after the said expiry date. Both parties initially believed that the Agreement was binding, but when the Seller was asked to sign the transfer documents she failed to comply and refused to give transfer. The Purchaser then sued the Seller to compel her to give transfer of the property, claiming that there was a valid Agreement despite the late acceptance of the Offer by the Seller. Part of the Seller’s defence was that since she accepted the Offer four days after it had expired the Deed of Sale was void.

The Court held that:

• The expiry date in the Offer to Purchase was a stipulation that was inserted for the exclusive benefit of the Buyer (Purchaser) who was entitled to waive that benefit.
• The Buyer had an opportunity to decide, after the late acceptance, to either accept or reject the acceptance, which decision had to be made within a reasonable time. Should the Buyer choose to reject the acceptance by the Seller, no Agreement would come into being. Should the Buyer accept the acceptance, he could waive the expiry date and proceed with the sale.
• The Seller who made the late acceptance was bound by the Agreement.
• The Buyer could communicate the waiver to the Seller by doing whatever he needed to do in terms of the Agreement, for example by signing documents, paying costs, etc. The Buyer’s decision to proceed with the Agreement can therefore be deemed from his conduct.
• The Buyer waived the expiry date by proceeding with the transfer and the Agreement was valid and enforceable. The Seller was ordered to sign all documents and take all steps necessary to effect the registration of transfer of the property.

In Closing: To avoid future disputes about the validity of such an Agreement, one should ensure that an Offer to Purchase is accepted before the expiry date. Should you find yourself in such a predicament, you can protect the Offer/ Agreement by immediately getting something in writing from the Purchaser wherein he/she unilaterally waives the benefit of this expiry date and confirms that he/she wishes to proceed with the Agreement/Transfer. The Seller should be informed about the Purchaser’s waiver as soon as possible. Another option is to amend the Offer to say that a late acceptance will not give rise to a binding Deed of Sale/Agreement. This will remove any doubt about the validity of such a late acceptance of the Offer.