Facts

An agreement of sale of a real right of extension was made subject to four suspensive conditions, each set out separately with a corresponding time limit for fulfillment thereof.

One of the suspensive conditions required that a special resolution was to be passed by the members of the Body Corporate to modify the contribution of members within a certain period.  When it became clear that this suspensive condition was not going to be met in time, the parties entered into a new agreement that incorporated the original agreement and specifically replaced the original time period with a new period.

The suspensive condition was thereafter in any event only fulfilled after the expiry of the new time period and therefore not met. The seller relied on the non-fulfillment of the suspensive condition rendering the agreement a nullity. The purchaser, wishing to enforce the agreement, claimed that upon proper interpretation of the agreement it sufficed that the condition was fulfilled within a ‘reasonable time’ (which was the time period set for one of the other three suspensive conditions).

Held

• The intention of the parties was clear in that the particular suspensive condition was to be met within the time limit as set out in the new agreement.
• The suspensive condition had not been fulfilled and it was not necessary to investigate whether the other suspensive conditions were also fulfilled or not.
• Proof of non-fulfillment of one condition is sufficient to render the agreement as a whole a nullity.
  

Moral of the story: Suspensive conditions in agreements need be perused carefully since non-fulfillment thereof renders it a nullity. In practice suspensive conditions will most often be encountered in the form of time limits set for qualifying for mortgage bond finance and practitioners must at all times monitor strict compliance therewith failing which the agreement will lapse in its entirety.  f it is foreseen that a time period will not be met, parties can be advised to extend the time period referred to in the suspensive condition, provided they do so before the agreement lapses.