In the matter of J Space (Pty) Ltd v O-Yes Auctions CC (38603/2021) [2024] ZAGPJHC 32, the High Court was required to determine whether an offer made by J Space (Pty) Ltd (J Space) to purchase immovable property owned by Chris and Monica Bolsover (the sellers) was duly accepted by the sellers.

In this case, O-YES Auctions CC (auctioneer) was instructed by the sellers to place the sellers’ immovable property on auction. J Space placed the highest bid of R1,850,000 and signed a written offer to purchase the property. The written offer included, among other things, that (i) the offer could not be withdrawn for three days, during which time, the sellers could accept the offer and enter into an agreement of sale, and (ii) J Space would, on signature of the written offer, make payment of the initial amount to the auctioneer (initial amount). J Space, in accordance with the written offer, made payment of the initial amount on signature of the written offer.

The counter-offer

The sellers rejected J Space’s offer of R1,850,000 and requested that it make an offer of R1,950,000. On 13 October 2020, J Space made a second offer to the sellers for R1,900,000 (R50,000 less than the requested purchase price) on the same terms and conditions as the first written offer. On 16 October 2020, the sellers signed the second offer but made certain amendments to the offer by deleting two paragraphs and altering one paragraph.

J Space requested that the auctioneer refund the initial amount because its second offer was not accepted, and no valid sale agreement was concluded between the parties. The auctioneer disagreed that the second offer was not accepted and refused to refund the initial amount. J Space then instituted legal proceedings against the auctioneer, requesting repayment of the initial amount because no legal basis existed for the auctioneer to retain payment.

In its submissions before the court, J Space argued that the first written offer was not accepted, and this was highlighted by the fact that the sellers requested a higher purchase price. In addition, the second written offer was not accepted within the three-day period provided by J Space to the sellers. As such, no valid and binding agreement was concluded between the parties.

The auctioneer disagreed with J Space’s contention and argued that the sellers did accept the second offer within three days, and that when they accepted the second offer a valid agreement was concluded between the parties. Regarding the amendments made to the written offer, the auctioneer argued that the two amendments – one relating to the person that would receive occupational rental and the second to deleting the obligations on the sellers to provide a gas certificate of conformity and an electric fence system certificate of compliance – were not material changes. 

The court’s findings

In analysing the parties’ submissions, the court found that the auctioneer did not advance any evidence to prove that the sellers accepted the first offer within three days. The sellers’ request that it would accept an offer of R1,950,000 constituted a counter-offer and a rejection of J Space’s first offer. As to the amendments made by the sellers to the second offer, the court found that the deletion of the clauses served to protect the sellers, and were material amendments.

The court held that J Space’s second offer was not accepted by the sellers and their amendments to the second offer constituted a second counter-offer. In the circumstances, no valid sale agreement came into existence between J Space and the sellers, and the auctioneer was ordered to repay the initial amount. 

In conclusion, it is unlikely that a court will declare that an offer has been accepted when the purported “acceptance” is conditional or unclear. In these cases, a court is likely to consider such an acceptance as constituting a counter-offer and will declare that no valid agreement has come into existence.