Restitution Discussion Group Archives
| Sender: |
Paul Tredoux |
| Date: |
Wed, 17 Sep 2003 22:57:04 +0200 |
| Re: |
Failure of consideration |
G'day all
Is anyone aware of any decided cases which provide authority
for the decision of the following problem:
A and B enter into an agreement of sale in terms of which
A sells and B purchases a mine for $7,000,000.00. The entire purchase
price is payable on signature of the contract.
The contract is signed on 1 September 1999, and a cheque
for $2,000,000.00 is issued by B and delivered to A as part-payment of
the purchase price. A banked the cheque but same was dishonoured and returned
marked "Refer to Drawer" that same day.
The relevant legislation provides that there is a three
year limitation period in respect of the obligations arising out of the
agreement of sale, but a six-year period in respect of the claim based
on the cheque.
A took no steps to enforce the agreement, or to claim
payment on the cheque for a period of three years. After the expiry of
the three year period he institutes action on the cheque.
(Accept that A and B are immediate parties on the cheque,
and that there are accordingly no special rules relating to negotiable
instruments which prevent B from raising defences which are relevant to
the underlying equities)
Is A entitled to enforce payment on the cheque (notwithstanding
that he is no longer able to enforce the agreement of Sale)?
Paul Tredoux
1217 Huguenot Chambers Tel: (021) 424-9646
40 Queen Victoria Street
Cape Town
8000
Fax: (021) 4222-575
<== Previous message Back to index Next message ==>
»
»
»
»
| For
editorial policy, see here. For the unedited archive, see here. The archive editor is Steve Hedley. |
