SECTION 3

SPECIAL SALES

3.1 Cash on delivery or collect on delivery (COD) Sales

A COD sale is premised on the general practice that sellers collect their
pretium upon delivery of the merx. It is essentially a manifestation of the
general rule that delivery and payment are concurrent obligations. Generally,
the seller’s agent in a COD sale is presumed not to have the authority to
accept payment. It follows that if the buyer pays an agent and the pretium
fails to reach the seller, the buyer will still remain liable to the seller.1 Like in
other contracts of sale, the buyer is entitled to a reasonable opportunity to
inspect the delivered goods before accepting or rejecting them.2

3.2 Free on rail (FOR) sales

FOR sales can come in the form of FOR seller station or FOR buyer’s station.
The station indicated is usually the place of delivery and delivery to that
station is deemed proper delivery to the buyer.3

In a FOR seller station, the seller pays all costs up to loading the goods on rail
wagons (sometimes referred to as trucks).4 In the Indian case of Marwar Tent
Factory v union of India5 the Court established the following:

Under a free on rail (F.O.R) the seller undertakes to deliver goods into railway
wagons or at the station (depending on the practice of the railway) at his own
expense and (commonly) to make such contract with the railway on behalf of
the buyer as is reasonable in the circumstances. Prima facie, the time of
delivery f.o.r fixes the point at which property and risk pass to the buyer and
the price becomes payable.

The seller also provides, at his own expense, the customary packaging of the
goods, unless it is the custom of the trade to dispatch the goods unpacked.
The seller then passes the railing instructions to the railways.6 Thereafter the
seller gives the buyer notice, without delay, that the goods have been loaded

                                                                                                               
1
Seider v Neumann 1944 SR 27.
2
See Khan v Robert 1921 CPD 654.
3
See Goldstein & Wolff v Maison Blanc 1948 (4) SA 446 and Gibson v Arnold & Co Ltd 1949 (4) SA 541.
4
See Leviseur & Co v Friedman 1922 OPD 182.
5
AIR 1990 Sc 1753.
6
See Newmark Ltd v Cereal Manufacturing Co Ltd 1921 CPD 52; Voigt Ltd v South African Railways
1933 CPD 4 and Meyer v Harvey 1933 (1) PH A37 (T).  

© Innocent Maja 1
or delivered into the custody of the railways and provides the buyer with
transport documents.

The buyer also has a number of obligations. First, the buyer must give the
seller the necessary instructions for dispatch in time. Second, the buyer must
take delivery of the goods from the time they are delivered into the custody
of the railways. Third, the buyer should pay the purchase price. Forth, the
buyer is obliged to bear all costs from the time goods are loaded in the
wagon or delivered to railway station. Finally, the buyer should bear all
customs duties and taxes that may be levied by reason of exportation.7

A few more legal points are worth noting. First, delivering goods to either the
railway station or the wagon (truck) is deemed proper delivery to the buyer8
with the railways being the buyer’s agent.9 Second, as a general rule this
delivery does not pass ownership unless parties agree otherwise.10 Ownership
usually passes to the buyer after the buyer has inspected the merx.11 Finally,
the seller and buyer should comply with all their common law duties generally
regulating contracts of sale.12

In a FOR buyer station, the seller usually pays the costs of loading as well as
any other costs necessary to deliver the merx to the buyer’s station. The
seller’s costs do not include cost of delivering the merx from the buyer’s
station to the buyer’s address13 or costs associated with storing goods in a
bonded warehouse.14

3.3 Cost, Insurance, Freight (CIF) sales

A C.I.F contract is a sale in which the seller undertakes to load the merx on a
ship bound for the buyer’s port, to pay the freight to that port and to take out
at his expense, a policy of maritime insurance covering the goods during the
voyage. Johnson v Taylor Bros and Company Limited15 succinctly described a
C.I.F sale as follows:
The vendor in the absence of any special provisions to the contrary is
bound by his contract to do five things. First, to make out an invoice of

                                                                                                               
7
See Sher v Frankel & Co 1927 TPD 375.
8
Laing v South African Milling Co Ltd 1920 AD 218.
9
Nel v South African railways and Harbours 1924 AD 30 36.
10
RH Christie Business law in Zimbabwe 170.
11
Weeks v Amalgamated Agencies Ltd 1920 AD 218.
12
See Sher v Frankel & Co 1927 TPD 375.
13
Stanger Milling Co v Greenwood Webster & Co 1926 NPD 279.
14
Stephen Fraser & Co v Clydesdale Transvaal Collieries Ltd 1903 TH 121.
15
[1920] AC 144 155-6. See also Alli and Abdulrasul v Daniel Bros & Co 1920 SR 76.  

© Innocent Maja 2
 the goods sold. Second, to ship at the port of shipment goods of the
description contained in the contract. Third, to procure a contract of
affreightment under which the goods will be delivered at the
destination contemplated by the contract. Fourth, to arrange for an
insurance upon the terms current in the trade which will be available for
the benefit of the buyer. Fifth, with all reasonable dispatch to send
forward and tender to the buyer these shipping documents – namely,
the invoice, the bill of lading and policy of assurance – delivery of which
to the buyer is symbolical of delivery of the goods purchased, placing
the same at the buyer’s risk and entitling the seller to payment of their
price… If no place be named in the cif contract for the tender of the
shipping documents they must prima facie be tendered at the
residence or place of business of the buyer.

A few key legal issues are worth noting regarding cif sales. First, the object
and result of the cif contract is to enable buyer and seller to deal with the
goods while afloat and to transfer them freely by giving constructive
possession thereof.

Second, ownership in the goods normally passes to purchaser upon transfer of

the bill of loading and concurrent payment. A bill of lading is a document
issued by the master of the vessel certifying that he has received the goods
for carriage to the port of destination and that freight had been paid. It is also
evidence of title of ownership so that any person in the lawful custody of the
bill of lading is entitled to claim delivery of the goods on delivery.16 The bill of
lading is freely transferrable to third parties subject to equities 17 by
endorsement and delivery. This has the legal effect of delivering goods
together with the benefit of the insurance policy to the third party.

Third, risk passes to the buyer upon shipment of the goods. Fourth, C.I.F
contracts usually provide that shipment is to be made within a prescribed
period and in such cases time is regarded as of the essence of the contract.
Any delay in sending the documents renders the seller liable to in damages to
the buyer.18

Fifth, once the seller tenders shipping documents, the buyer is obliged to pay
the purchase price in terms of the contract irrespective of whether the goods

                                                                                                               
16
See Lendalease Finance (Pty) Ltd v Corporation de Mercadeo Agricola 1976 (4) SA 464 (A) 491-2.
17
Since the transfer is subject to equities, it therefore follows that a bill of lading is merely a transferrable
instrument and not a negotiable instrument that is transferred free from equities.
18
See Garavelli and Figli v Gollach and Gomperts (Pty) Ltd 1959 (1) SA 816 (W).

© Innocent Maja 3
are destroyed or the buyer takes physical delivery of the goods.19 The carrier
effects physical delivery and not the seller.

Sixth, upon delivery of the bill of lading, the buyer can either accept the
documents if they comply with the contract of sale or reject the documents if
they fail to comply with the contract. Finally, upon physical delivery of the
merx by the carrier, the buyer is entitled either accept the merx or reject it if it
does not tally with the contract description.

3.4 Free on board (F.O.B) sales

An F.O.B sale is a contract in which the seller undertakes to load the merx on
a ship bound for the buyer’s port, leaving everything else, including freight
and insurance for the voyage to the buyer.20

In a F.O.B sale delivery is deemed to have been effected upon shipment

provided the merx complies with the contractual description. Again, payment
is generally due at the time of the said delivery unless otherwise agreed.21

3.5 Instalment sale of land

This kind of sale is governed by the Contractual Penalties Act [Chapter 8:04].
Section 2 of the said Act defines an instalment sale of land as
a contract for the sale of land whereby payment is required to be made—
(a) in three or more instalments; or
(b) by way of a deposit and two or more instalments;
and ownership of the land is not transferred until payment is completed

It is interesting to note that in Khumalo v Mandeya and Another,22 the court

regarded an instalment sale of land that had not yet been transferred to the
seller not to be an instalment sale of land as envisaged by the Contractual
Penalties Act but as a contract of cession of rights and interests in land. In
Chimpondah and Another v Muvami,23 the court regarded a contract where
parties initially agreed on a cash sale but later changed to payment of the
purchase price in over three installments as a installment sale of land as
envisaged by the Contractual Penalties Act.

                                                                                                               
19
See Frank Wright (Pvt) Ltd v Corticas BCM 1948 (4) SA 456; Ma Motala v Mengyo & Co 1936 NPD 52;
Sharpe v Nosawa [1917] 2 KB 814 and Chattanooga Tufters Co. v Chenille Corporations of SA Ltd 1974
(2) SA 10 (E).
20
See Murray & Co v Stephan Bros 1917 AD 243.
21
Anderson & Coltman Ltd v Universal Trading Co. 1948 (1) SA 1277.
22
2008 (2) ZLR 203 (S)
23
2007 (2) ZLR 326 (H).  

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Section 5 of the Act limits a creditor’s relief to either a penalty or damages but
not both. Section 7 requires that an instalment sale of land be reduced into
writing. If the agreement is not reduced into writing, the same section places
the onus to prove the existence of such instalment sale of land on the person
alleging its existence.

Whenever there is breach of contract, section 8 obliges the seller not to

enforce a penalty stipulation, enforce an acceleration clause, terminate the
agreement or institute legal proceedings for a claim for damages unless the
seller gives notice in writing, highlighting the breach and giving either at least
30 days to rectify breach or a period stipulated in the agreement (whichever is
longer) and the period of the notice has expired without the breach being
remedied, rectified or discontinued. This provision literally forces the seller to
place the buyer in mora through a letter of demand before either cancelling
the agreement or enforcing the agreement using the avenue of instituting
legal proceedings.

Section 9 allows the Court to intervene wherever there are forfeiture

provisions to ensure that the enforcement of the forfeiture clause is not
disproportionate to the prejudice suffered by the seller. Section 11 of the Act
prohibits a waiver of rights provided for in the Contractual Penalties Act.

3.6 Hire Purchase agreement

Section 3 defines a Hire Purchase agreement as any sale of movable property
where the pretium should be paid in two or more instalments.24 As security,
the seller retains the right to repossess the goods should the buyer fail to pay
the said instalments. The hire purchase system enables the buyer to acquire
goods which they may not otherwise have afforded if they had to buy cash.

Hire purchase agreements are regulated by the Hire Purchase Act (Chapter
14:09). Three sections25 apply to all hire purchase agreements. For instance,
section 5 requires that every hire purchase agreement should be reduced into
writing and contain a statement of the cash price. Failure to comply with this
provision reduces the purchase price by 25% and disempowers the seller from
enforcing a contract of suretyship. 26 It is permissible for a hire purchase
agreement to be executed in conformity with section 5 with retrospective
effect.27 Again sections 23 and 24 of the Act clearly indicate that the seller’s

                                                                                                               
24
It excludes transactions where the state is the seller.
25
Section 4 of the Act.
26
National Industrial Credit Corporation (Rhodesia) Ltd v Gumede (2) 1964 (2) SA 240 (SR).
27
National Industrial Credit Corporation (Rhodesia) Ltd v Gumede 1964 (2) SA 42.  

© Innocent Maja 5
insolvency does not affect the hire purchase agreement which remains
binding on the trustee or liquidator.

All the other sections apply to hire purchase agreements that do not exceed
$3 000 or any amount stipulated by the responsible Minister. Section 6
requires that the seller send the agreement to the buyer by registered post.
Section 7 requires that the rate of interest, the purchase price and the
instalments to be paid be included in the agreement. Section 8 invalidates
exemption clauses and the charging of inflated interest. Section 9 gives the
purchaser the right to receiving statements of account. Section 10 obliges the
purchaser to notify the seller of any change of address and section 11
empowers the seller to incorporate a provision that forbids removal of goods
from Zimbabwe.

The Hire Purchase Act also provides for a number of rights that the buyer
possesses. For instance, section 12 provides for the buyer’s implied warranties
to enjoy quiet possession, to receive ownership when it is due and all other
implied warranties ordinarily contained in a contract of sale under common
law.28 The other rights of the purchase are contained in sections 13, 14, 15,
16, 17, 18, 20, 22, 26, 27 and 28. They include the right to be reimbursed
within 21 days if the seller repossesses his goods.29 Section 17 makes it clear
that ownership in a hire purchase agreement is passed once all instalment
payments of the purchase have been made. Section 22 does not allow waiver
of rights. Section 26 exempts the buyer from paying instalments where he is
carrying out national service and is hospitalised.

The major weakness of the Hire Purchase Act is that most of its provisions
(excluding sections 5, 23 and 24) only apply to hire purchase agreements
whose pretium does not exceed $3 000. These provisions may not necessarily
apply to hire purchase agreements exceeding $3 000.

3.7 Conditional sales

Conditional sales come in two forms namely suspensive and resolutive
conditional sales.

A. Suspensive Condition/Condition Precedent

This suspends or postpones the operation of a contract or obligation until the
condition is fulfilled, or it is certain that the condition fails.30 For example, A

                                                                                                               
28
See Sprite KM (Pvt) Ltd v Tawurai 1961 (2) SA 724.
29
Section 15 of the Act.
30
Okeke v Duro & Co (Pvt) Ltd 2006 (1) ZLR 506 (H). A suspensive condition is, however, different from
an agreement to agree in the future and enter into a proposed final agreement. Such an agreement

© Innocent Maja 6
can agree with B that A will buy B’s racehorse for US$1 000 if the horse wins
on Saturday. The operation of the contract or obligation to pay is suspended
until the horse either wins or it becomes clear that it is not going to win.

Before fulfillment of the condition, there is a valid contract at the conclusion of

the contract but the operation of the contract or obligation is postponed or
suspended until the condition is fulfilled.

One question that Zimbabwean courts have dealt with is whether a condition
precedent should be fulfilled in forma specifica (in the exact manner stated by
the parties in the agreement), or per aequipollens (in some equivalent
manner). This question was addressed in Runatsa v Rumani Estates (Pvt) Ltd &
Ors,31 where the Court held that the answer depended upon the intention of
the parties as expressed in the agreement. If the intention of the parties as
expressed in the agreement is such that fulfillment of a condition has to be in
forma specifica as in the Runatsa case, then fulfillment has to be in forma
specifica.

Conversely, if the intention of the parties as expressed in the agreement is

such that fulfillment of a condition has to be per aequipollens, substantial
fulfillment of the condition then suffices. This position was emphasised in
Mazodze v Mangwanda, 32 where the appellant sold a house to the
respondent. One of the conditions of the sale was that the respondent should
obtain a loan from Kingdom Bank. Instead of obtaining a loan from Kingdom
bank, the respondent obtained a mortgage bond from CABS, guaranteed by
Kingdom Bank. He tendered payment but the appellant sought to resile from
the contract on the pretext that the transference was not strictly in accordance
with the wording of the agreement. The Court held that even though there
was a condition precedent, the respondent had satisfied it by tendering the
purchase price within the stipulated period even though the money was not
from the specific bank.

B. Resolutive Condition/Condition Subsequent

This causes a fully operational contract or obligation to come into effect at the
time of conclusion of the contract but it may be terminated (resolved) if the
condition is fulfilled.33 For example, ‘I will pay you US$300 per month until you
graduate and find a job.’ The contract comes into operation as soon as it is

                                                                                                                                                                                                                                                                                                                               
does not constitute a contract between the parties as they lack legal certainty. For a discussion of such
an agreement see CAG Farms (Pvt) Ltd v Hativagone & Ors HH-157-14.
31
2009 (2) ZLR 286. See Forestry Commission v Cell Insurance Company (Pvt) Ltd HH-116-2013.
32
2005 (1) ZLR 87 (S).
33
See McAninch v Maisiri & Anor 2002 (2) ZLR 54 (S).

© Innocent Maja 7
concluded and terminates upon your graduation and finding a job or if it
becomes clear that you are never going to graduate and get a job.

C. The doctrine of fictional fulfillment of a condition

It provides that if any of the parties frustrates the fulfillment of the condition,
the condition is deemed to be fulfilled. The following requirements should be
met before the doctrine of fictional fulfillment can be applied:
i. One party must deliberately prevent fulfillment of the condition;34
ii. In breach of the duty on the party not to prevent fulfillment and
iii. The actions of such party must cause the non-fulfillment of the
condition.35

Pending the fulfillment of the condition, neither party should act in such a way
as to destroy the rights of the other party if the condition is fulfilled. The time
allowed for the fulfillment of the condition depends on the wording of the
contract. If there is a fixed period and the condition is not fulfilled within such
period, the contract falls away in the event of a suspensive condition or
becomes unconditional in the event of a resolutive condition. If there is no
fixed period, the courts will assume that the condition was supposed to be
fulfilled within a reasonable time.36

Fulfillment or non-fulfillment of a condition precedent operates

retrospectively, making the contract valid or invalid with effect from the date
of the contract.37 Any value that has exchanged hands should be returned.38

Hanakira v Mapfumo and Another39 established the following:

It is a fundamental principle of our law of contract that the non-fulfillment of a
suspensive condition does not render the contract illegal or void. A
suspensive condition merely suspends the operation of all or some of the
obligations of the contract until the occurrence of a future event. Its non-
fulfillment does not per se vitiate the contract.

3.8 Sale in execution

A sale in execution is one that is done by the Sheriff of the Court or his

                                                                                                               
34
See Clapham v Struckel 1980 (2) SA 71(ZR); McHardy v Olifant 1905 ORC 42 and Cyster v Du Toit
1932 CPD 345.
35
Scott v Poupard 1971 (2) SA 373; Koenig v Johnson & Co 1935 AD 262.
36
See Design and Planning Service v Kruger 1974 (1) SA 689 (T) 696H.
37
See Absa Bank v Sweet 1993 (1) SA 318; MacDuff & Co v Johannesburg Consolidated Investments
Co. Ltd 1924 AD 573.
38
See Sleightholme Farms (Pvt) Ltd v National Farmers Union Mutual Insurance Society Limited 1967 (1)
SA 13 (R); Malaba v Takangovada 1990 (3) SA 413 (ZH); Ncube & Anor v Willey & Anor 1985 (2) ZLR 69
(H).
39
HH-155-10.

© Innocent Maja 8
representative in terms of the law. It can be by private treaty or through a
public auction. Such a sale is generally regarded as a conditional sale before it
is confirmed.

However, a judicial sale can legitimately be set aside. Order 40 r359 (1) of the
High Court of Zimbabwe Rules provides that:
(1) Subject to this rule, any person who has an interest in a sale in terms of this
Order may request the Sheriff to set it aside on the ground that—
(a) the sale was improperly conducted; or
(b) the property was sold for an unreasonably low price;
or on any other good ground .”

In Mapedzamombe v Commercial Bank of Zimbabwe and another40 the court

established the following:
Before a sale is confirmed in terms of r 360, it is a conditional sale and any
interested party may apply to court for it to be set aside. At that stage, even
though the court has a discretion to set aside the sale in certain
circumstances, it will not readily do so. See Lalla v Bhura 1973 (2) RLR 280 (G)
at 283A-B. Once confirmed by the sheriff in compliance with r 360, the sale of
the property is no longer conditional. That being so, a court would be even
more reluctant to set aside the sale pursuant to an application in terms of r
359 for it to do so. See Naran v Midlands Chemical Industries (Pvt) Ltd S-220-
91 (not reported) at pp 6-7."

The onus rests on the applicant to show that the sale was improperly
conducted or that the property was sold at an unreasonably low price or any
other ground.

In Chizikani and Anor v Central African Building Society41 the court allowed an
application to set aside a sale on the basis that the advertisements were
inadequate. In the court’s words:
An advertisement which inadequately describes the property is no
advertisement at all. It will fail to comply with the Sheriff‟s mandate
obligation. The purpose of properly describing the property is not merely to
identify it. It is also to inform the public of what which is being sold, with the
aim of attracting the interest of potential purchasers to the auction … for it is
in the interests of the judgment debtor, and probably in the interests of
creditors, that the property to be sold should obtain as high a price as
possible.

The court also remarked that what must be inserted in the advertisements are
the main characteristics of the property. The court found that the
                                                                                                               
40
1996 (1) ZLR 257 (S) at 260C-E
41
1998 (1) ZLR 371.

© Innocent Maja 9
advertisement of the sale was inadequate as it did not give sufficient details of
the nature and characteristics of the property enabling potential purchasers to
get a clear appreciation of the property. The Court emphasized the need for
an advert in its description of the property, to state the address, size of the
stand, type of improvements or buildings if any and any special privilege
related to the property.

This approach places a duty on potential buyer to go to the property and view
the property. One has to consider that the provision is mandatory, a failure by
the sheriff to describe the property adequately or properly invalidates the
sale.42

3.9 Subdivision sales

For a discussion of subdivision sales see Mikesome Investments (Pvt) Ltd v
Silcocks Investments (Pvt) Ltd 2003 (2) ZLR 56 (H)

3.10 Option and right of first refusal

A. Option
This is when two parties agree to keep an offer open for a specified time.43
According to Firstel Cellular (Pvt) Ltd v Sefaidiga & Another44 an option is an
‘offer’ which is irrevocable by the grantor during the period stipulated in the
contract or, if there is no such provision, within a reasonable time. If the
option is exercised, the potential contract contemplated by the parties to the
option agreement is complete. The option holder merely has to accept the
offer in the manner and within the time prescribed by the option, and a new
contract comes into existence between him and the other party. An option
constitutes nothing more than an offer coupled with an arrangement (express
or implied) to keep the offer open for a certain period. It is fundamental to the
nature of any offer that it should be certain and definite in its terms. It must be
firm, that is, the offer must be made with the intention that its mere
acceptance binds the offeror.

Once a person (A) gives an option, he or she is bound and cannot withdraw
it.45 If the offeree (B) does not accept the offer within the stipulated time, then
the offer can lapse and A can make an offer to a third party. However, if A
offers to a third party before the stipulated time elapses, he will be in breach

                                                                                                               
42
See also Chikwavira v The Sheriff of Zimbabwe and Another HH-357-13.
43
See Eastview Gardens Residents Association v Zimbabwe Reinsurance Corporation Limited and Ors
2003 (2) ZLR 388 (H).
44
HH-70-12.
45
See Boyd v Nel 1922 AD 414.

© Innocent Maja 10
of the offer. This breach entitles the option holder (B) either to exercise his
option, apply for an interdict or sue for damages.

If B decides to exercise his option, he may claim specific performance of the

main contract. This position was illustrated in Tobacco Sales Limited v
Agriculture Investments (Pvt) Ltd and Others 46 where the Court held as
follows:
An option to purchase can remain open for an indefinite time, if that is what
the parties to the contract have agreed. Such an agreement can endure for an
indefinite time and during that time be exercisable at the will of the grantee.47

An option can come in the form of an option to buy, an option to sell or an

option to enter into any other type of contract.48

B. Right of first refusal or preemptive right

This is an agreement that entitles the holder to the first opportunity of buying
if the seller decides to sell.49 In Madan v Macedo Heirs,50 it was held that there
is no need for the purchase price to be stipulated in the right of first refusal.

In Makamure v Deven Engineering (Pvt) Ltd,51 the Court summarizes the steps
that should be taken before a right of pre-emption is exercised as follows:
In my view, the above captions describe the essential elements of the right of
pre-emption (or first refusal) in terms that are both clear and unambiguous.
My reading of these requirements is that the following steps must, in that
sequence, be followed in the exercise of the right of pre-emption:
a) a specific third party offers to buy the property at a given price;
b) the grantor is prepared to sell at that price; but
c) before accepting the buyer’s offer, the grantor reverts to the right of
preemption, informs him of his decision to sell at the price offered by the
particular buyer and asks him (grantee) to exercise his right of first refusal.
Thereafter, the outcome, in terms of who ends up buying the property,
depends on the grantee’s decision on whether to exercise his right … The
grantor of a right of pre-emption cannot be compelled to sell the subject of
the right. Should he, however, decide to do so, he is obliged, before
executing his decision to sell, to offer the property to the grantee of the right
of pre-emption upon the terms reflected in the contract creating that right.52

                                                                                                               
46
1982 (1) ZLR 180 (H).
47
See also Eastern Motors (Pvt) Ltd v City of Mutare 2002 (2) ZLR 735 (H).
48
Thompson v Van der Vyver 1954(2) SA 192 194.  
49
See Central African Processed Exports (Pvt) Ltd and Ors v Macdonald and Ors 2002 (1) ZLR 399 (S).
50
1991 (1) ZLR 295 (S).
51
2008 (2) ZLR 319 (H) 323 D-E.
52
Makamure case n70 324B.

© Innocent Maja 11
It is important to note that if the seller sells to a third party before offering the
grantee at the material time, then the seller will be in is breach of the
preemptive right and will be liable to pay damages. The approach adopted by
Zimbabwean courts was summarized aptly in Sawyer v Chioza and Others53
where the Court held that:
… [t]he right of first refusal imposes a duty on the seller to offer the property
to the lessee at the price which the other would-be purchaser has offered. If
the lessee accepts that price, the lessor must sell it to him at that price. If he
refuses, the right of first refusal falls away and the lessor is entitled to sell to
the other person… An agreement of pre-emption contains both a negative
and a positive element. The negative element is that the grantor is restrained
from selling to a third party; the positive element is once he is prepared to sell
he is under obligation to sell to the grantee.

In Crundal Brothers (Pvt) Ltd v Lazarus,54 the Court held that the courts reserve
a general discretion to either grant or refuse an order for specific
performance.

It is interesting to note that in Nerger Properties (Pvt) Ltd v R. Chitrin and

Others (Pvt) Ltd,55 the Supreme Court averred that the right of first refusal is
the same as the right of an option. In substantiating his judgment, the
Honourable Cheda JA quotes Mackeurtan’s Sale of Goods in South Africa56
where it stated as follows:
The rights of the holder of an option, or of a pre-emptive right, to interdict
the delivery of the thing in question to a subsequent purchaser and to obtain
specific performance are the same in law as those of a prior purchaser. The
right of the holder of an option or of a pre-emptive right to exercise it remains
prior in time to the personal right of a subsequent purchaser, even where the
latter was ignorant of the option or right of preemption.

According to the Nerger judgment, the similarity between an option and the
right of first refusal lies in the remedies of an interdict and specific
performance whenever there is a breach.

                                                                                                               
53
1999 (1) ZLR 203 (H).  
54  1991  (2)  ZLR  125  (S).  
55  2006  (2)  ZLR  287  (S)  291.  
56  HG  Mackeurtan  &  GRJ  Hackwill  Mackeurtan’s  Sale  of  Goods  in  South  Africa  (1984)  277-­‐17G.1.6.  

© Innocent Maja 12