
16 Oct The importance of sticking to a contract – Lessons for the Property Practitioner
It is most useful to refer to the fairly old court judgement of Ficksburg Transport v Rautenbach delivered in 1987, to demonstrate the importance of ensuring that all parties stick the terms of a contract.
The summarised details of the case are as follows:
- Ficksburg Transport had entered into a lease agreement with Rautenbach.
- The lease agreement contained an option to renew the contract.
- Clause 4.2 of the contract required that the option was to be exercised by delivery of a written notice to that effect to the owner, before the end of the contract.
- One of the directors of Ficksburg Transport tried to contact Mr Rautenbach prior to the end of the lease agreement, but Mr Rautenbach had gone to visit his family and was not available.
- On the last day for exercise of the option, Mr Rautenbach was still not contactable. This was in days long before cell phones and electronic communications!
- One of the directors of Ficksburg Transport went to Mr Rautenbach’s property and served the notice of exercise of the option on one of Mr Rautenbach’s employees.
- Upon Mr Rautenbach’s return, he was given the notice of exercise of the option, but was of the opinion that the exercise of the option was not valid. This was due to the fact that the tenant had not served the notice on him personally, as the owner of the property.
- In the ensuing court case, the tenant made reference to the fact that the domicilium citandi et executandi was the property where the notice had been served on Mr Rautenbach’s employee.
- The judge discussed the meaning of domicilium citandi et executandi and referred to the fact that there are numerous sources of authority to indicate that the domicilium citandi et executandi is the address for the service of legal process.
- The judge ruled that the requirement for the exercise of the option was very clearly articulated in Clause 4.2 of the lease agreement, which meant that the notice of exercise of the option had to be delivered to Mr Rautenbach personally. As this had not happened, there was no valid exercise of the option. The fact that the address of the property was the domicilium citandi et executandi, was irrelevant.
There are a number of important lessons for the Property Practitioner (PP) that we learn from this case:
- The domicilium citandi et executandi address is the address for the service of legal process.
- This address must be a physical address and cannot be a post box address, for example.
- It is very likely that, that an agreement will make provision for the service of legal process and ordinary notices. The exercise of the option in the Rautenbach case, would qualify as an ordinary notice.
- One could have the same address for the domicilium address and the service of ordinary notices.
- In the Rautenbach case, it was clear that the exercise of the option required delivery of the notice to the owner personally. It was not acceptable to serve the notice on Mr Rautenbach’s employee.
Hence, if your agreements have certain requirements, then as the PP, you must ensure that these requirements are adhered to. Alternatively, non-adherence may invalidate the contract and render it of no force and effect.
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