South Africa's Supreme court ruling: lapsed contracts can't be revived without written reinstatement

Zawya

17-04-2025

In business, timing can make or break a deal – especially when it comes to legal agreements.
A recent decision by the Supreme Court of Appeal (SCA) in Vantage Goldfields SA (Pty) Ltd v Siyakhula Sonke Empowerment Corporation (Pty) Ltd and Another has clarified an important principle: once a contract has lapsed due to an unmet suspensive condition, you can't simply treat it as alive and binding again without starting afresh by reinstating the lapsed agreement in writing and, in such reinstatement agreement, amending the cause relating to the lapse.
This case serves as a reminder to business leaders, especially in property, mining, and commercial sectors, that contracts with suspensive conditions (conditions that must be met before the agreement takes full effect) are not flexible by default. Unless those conditions are fulfilled - or the deadlines for fulfilment are properly extended in writing before they expire - the contract will lapse / be null and void. And once dead, it doesn't spring back to life on good intentions or conduct alone.
A simple practical example will easily explain the above principle:
- Mr X sells his property to Mrs Y and the agreement contains a suspensive condition to the effect that the Mrs Y must obtain bond approval on or before the 19th of February 2024.
- The bond approval is granted on the 26th of February 2024 and, on the same day, the parties sign an addendum to the effect that the bond approval due date is extended to the 26th of February 2024.
- The agreement between Mr X and Mrs Y lapsed when the bond grant was not issued on the 19th of February 2024.
- The fact that an extension was signed on the 26th of February 2024 and / or that the bond was approved on the 26th of February 2024 does not bring the agreement back to life.
- To ensure that the agreement stayed alive, the extension should have been signed on or before the 19th of February 2024, prior to the lapsing of the agreement.
- The correct and only way to reinstate the lapsed agreement, would be to sign a reinstatement agreement which must also contain a clause to the effect that the Bond Approval due date is extended to the 26th of February 2024.
- If the reinstatement agreement does not contain a clause to extend the due date, the original reinstated agreement will self-destruct immediately due to the original bond approval due date not being met.
Case Background
In 2017, Vantage Goldfields entered into a R310m share sale agreement with Flaming Silver Trading. The contract was subject to several suspensive conditions, including:
- Securing full financing by a specified date;
- Payments that had to be made by a specified date;
- Obtaining regulatory approvals, such as ministerial consent under the MPRDA.
The agreement clearly stipulated that if these conditions weren't met by the due dates, the deal would lapse - unless the deadlines were extended in writing before they expired.
Despite some payments being made and several "addenda" (contract amendments) being signed between the parties, these extensions were not signed on or before the due dates for the fulfilment of the suspensive conditions.
Vantage argued that the various addenda effectively revived the original agreement - even though it had lapsed. The company pointed to cases that suggest lapsed contracts can be revived, provided the parties clearly agree to it and amend the problem clauses.
But the SCA disagreed. In its January 2025 judgment, the court found that:
- The agreement had indeed lapsed due to non-fulfilment of suspensive conditions (particularly the payment condition);
- The parties never expressly revived the lapsed contract in a way that complied with the legal requirements;
- Even the attempt to "deem" certain conditions as fulfilled after the deadline was legally ineffective;
- A R1m payment made as a so-called non-refundable pre-payment was not enforceable and had to be repaid.
In short: the contract lapsed as soon as the deadlines, relating to the suspensive conditions, passed without proper extension. Trying to stitch it back together with addenda simply didn't hold water.
What does this mean for business?
This case is more than a technical legal ruling - it offers real-world lessons for companies negotiating deals that hinge on suspensive conditions, especially in sectors like property, mining, finance, and M&A. Here are the key takeaways:
1. Suspensive conditions are not flexible suggestions
When an agreement includes specific deadlines for the fulfilment of suspensive conditions, those deadlines are binding. If you miss them without having agreed - in writing - to an extension beforehand, the agreement automatically lapses. No amount of post-deadline cooperation or continued engagement can reverse that legal consequence unless very specific steps are taken.
2. Paper trails protect your position
Good intentions and business relationships mean little without a formal, signed amendment. If a contract says that changes must be made in writing and signed by both parties, any attempt to alter it informally - even if both sides verbally agree - will likely fail in court. Be sure to follow the contract's rules for amendment and variation.
3. You can't pretend a dead Contract is still alive
Reviving a lapsed contract is possible in theory - but only through a new agreement or a clear, written reinstatement agreement that properly addresses the expired condition. Courts will not infer revival from conduct alone, and simply continuing to act as though the contract is still in place can lead to confusion, disputes, and expensive litigation.
4. Deeming Clauses don't override legal reality
The parties in this case tried to include clauses stating that the conditions were "deemed" to have been met - even when they weren't. The court made it clear that such clauses can't rewrite history. A fiction remains a fiction, and courts deal in facts. Compliance must be real and timely, not constructed after the fact.
As this case shows, even sophisticated parties with the best intentions can run into serious trouble when timelines and formalities are not respected. If you're dealing with a lapsed agreement, speak to your legal advisors before attempting a revival - otherwise, you may be trying to breathe life into a contract that's already buried.
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