Subject to suspensive conditions of bond approval
For clarities sake, a suspensive condition suspends the obligations flowing from a contract until the occurrence of an uncertain future event. As an example, the obligations flowing from an OTP could be subject to the purchaser obtaining bond approval. Once the purchaser obtains the approval, the contract comes into operation and would be binding on the parties. Importantly, the agent would also have earned their right to commission which would become due on date of transfer.
In light of the above, it is of the utmost importance for the purchaser to familiarise himself/herself with the terms and conditions of the OTP. Due consideration must be given to aspects such as date of occupation, occupational rent, improvements made and general conditions of sale. Once signed and provided the suspensive condition(s) are fulfilled, the purchaser is bound to that agreement.
'In breach, without any underlying legal cause'
Should any party fail to adhere to the terms of the OTP without an underlying legal cause, that party will stand in breach of the contract. The other party would thus be entitled to cancellation, to claim damages or to claim for specific performance. Additionally, the party who stands in breach could also be held liable for the agent’s commission where the relevant suspensive conditions have been fulfilled.
In this instance, it seems that the agreement was subject to bond approval which was subsequently obtained. The purchaser would thus stand in breach should he/she cancel the agreement unless he/she has an underlying legal cause. Which brings us to the relevant discussion below.
Within our law of contract, a party who signs a document containing contractual terms is generally bound by his/her signature whether he/she read the document or not.
'Grounds of misrepresentation'
However, this rule is not absolute. The law also recognises that it would be unconscionable for a person to enforce the terms of a document where he/she misled the signatory, whether intentionally or not. Furthermore, in terms of industry specific regulations, an estate agent should not wilfully or negligently make any false statements or misrepresentations or willingly mislead and influence a prospective purchaser.
With that being said, in this scenario the agent made false statements to the purchaser regarding the date of occupation and thus made a misrepresentation which had the purchaser being aware of, would not have entered into the contract. The purchaser would have a legal ground to cancel making the agreement voidable at the purchaser’s election. If the purchaser cancels the agreement, he/she should be placed in the same position as prior to the conclusion of the offer to purchase.
Even though the misrepresentation was made by the estate agent it was done within the scope of his/her mandate authorised by the seller. The seller therefore in return would have a claim against the estate agent for any damages suffered as a result of the cancellation of the agreement.