Hersch v Nel

• Jurisdiction: South Africa
• Judge: Tindall ACJ, Centlivres JA, Greenberg JA, Schreiner JA and Davis AJA
• Judgment Date: 16 June 1948
• Citation: 1948 (3) SA 686 (A)
• Hearing Date: 28 May 1948
• Court: Appellate Division

Schreiner, J.A.:

I agree with the conclusion arrived at by my brother DAVIS and with his reasons therefor; but I wish to mention a few further considerations on the general question of the cedability of offers and options, which have influenced me. It is sometimes said to be trite or elementary law that an offer can be accepted only by the person to whom it is made. (See, for

Schreiner JA

instance, Blew v Snoxell (1931 TPD 226 at p. 229); Bala v Van der Westhuizen (1941 TPD 5 at p. 8); Williston, on Contract (revised ed. sec. 80); American Restatement, Contract sec. 54). It seems to me, however, that this statement may be misleading if 'the person to whom the offer is made' is understood in its ordinary sense as the person to whom the words of the offer are uttered or the letter or other writing is addressed; for what decides who can accept an offer is the intention of the offeror as proved by the terms of the offer and by any other evidence that may be admissible. It is not uncommon to support the statement that only the person to whom the offer is made can accept by a reference to Boulton v Jones (2 H and N 564; 157 E.R. 232); but I read the judgments in that case as meaning that on its proper construction in the circumstances the offer was intended to be an offer that Brocklehurst alone could accept. That the order was addressed to him was, of course, the most important factor in ascertaining that intention but it was the intention that was the factum probandum. In the great majority of cases an offer made by A to B is intended by A to be open to acceptance by B and by no-one else, but there is no notional or juristic obstacle to an offer addressed to B being acceptable by C; it is simply a question of interpretation of the offer. So if an offer is made by A to B and his assigns, A's intention is clear that B may pass the offer on to C, who may make a binding contract with A by notifying his acceptance to the latter (cf. Williston. loc. cit. at p. 232). If B merely told C that he had received such an offer this would not enable C, by notifying A of his acceptance, to bring a contract with the latter into existence. B would have had to convey or cede his right to accept to C before the latter could himself make a contract by accepting. So too if, instead of saying that the offer is to B and his assigns, A tells B that the offer is assignable the same result follows. And the position would be the same if, for instance, the offer is contained in a letter which nowhere states that the offer is to the addressee and his assigns or that it is assignable but which on its proper construction shows that the offer is intended to be, and therefore is, assignable. Just as the proper construction of the whole contract may be that it is assignable although there is no express statement to that effect (Tolhurst v Associated Portland Cement Manufacturers (1903, A.C. 414)) as explained in Nokes v Doncaster Amalgamated Collieries (1940, A.C. 1014 at p. 1020), so in the case of an offer.

Schreiner JA

its terms and the relevant circumstances must be considered to see whether it must be accepted, if at all, by the party to whom it was addressed. An offer to the public generally, such as that in the smoke-ball case (Carlill v Carbolic Smoke Ball Company (1893, 1 Q.B. 256)), illustrates the fact that an offer is not necessarily made only for acceptance by a particular person whom the offeror has in mind, as an identified individual, at the time when he makes the offer; and, similarly, when the offeror publishes his offer to a particular person it may appear that that person is not intended to be the only potential acceptor.

It may, however, be assumed that, in general and in the absence of indications in its terms or in the circumstances to the contrary, an ordinary revocable offer is intended by the offeror to be acceptable only by the person to whom it is addressed. For although even such an offer, though it may be withdrawn at any time, may be of great value, it is not a normal basis for further dealings by the person to whom it is addressed. Because of its liability to vanish on withdrawal it would not be readily saleable; it could not, for instance, be used as a satisfactory foundation for financing the exploitation of the thing sold through the medium of a partnership or company.

But in the case of an offer which the offeror has undertaken to keep open for a fixed or ascertainable time, which is usually called an option, no such assumption against assignability would accord with common practice or the needs of the community. On the contrary, in the absence of circumstances or language in the offer showing that the intention of the grantor was that only the person to whom the option was addressed, i.e. the grantee, should be entitled to accept it, the general assumption would be that the grantee may pass the right to accept on to other persons. All the circumstances would, of course, have to be taken into account. An important factor in considering whether the grantor intended the option to be personal to the grantee would be whether credit to the acceptor would be involved, for naturally it is not lightly to be supposed that the grantor would be prepared to give credit to a person whom he did not know. But again it would depend on the proper interpretation of the option in the light of the circumstances.

In the present case it seems to me that if one approaches the option in question on the lines suggested above the only conclusion one can come to is that it could be effectively ceded.

Judgment

Davis, A.J.A.:

the Plaintiff (Now the Appellant) Filed a Declaration in the Orange Free State Provincial Division Claiming Damages from the Defendant (Now the Respondent). He Set Out that the Defendant Granted a Month's Option to Els and Abe Hersch to Buy Certain Two Farms. Defendant Did So Acting on His Own Behalf (He and His Wife, to Whom He Is Married in Community of Property, Being the Usufructuaries of the Farms) and Representing Himself to be the Duly Authorised Agent of a Mrs. Esterhuizen, the Registered Owner of the Farms: that the Said Els and Hersch Believed This Representation and Entered into the Contract on the Faith of It. Els and Abe Hersch, the Declaration Continued, Duly Ceded the Option to the Plaintiff on 6th June, 1946, and ON the Same Day He Duly Accepted and Exercised the Option and Duly Notified the Defendant Thereof, But the Defendant Had NO Authority from Mrs. Esterhuizen to Grant the Option and She Refused to be Bound by It. the Defendant Asked for Certain Particulars and Received Certain Replies with which I Shall Deal Later. the Option Was as Follows

'OPSIE OM TE KOOP.

Ons, die ondergetekende:

(1) Maria Magdalena Johanna Catharina Esterhuizen (gebore Nel), getroud met Josias Justus Esterhoven Esterhuizen, en deur hom bygestaan (as eienaar), en (2) Jan Johannes Nel (as vruggebruiker), gee hiermee aan:

(1)

Willem Anthonie Els, (2) Abe Hersch gesamentlik, die enige en uitsluitlike reg en opsie om ons plase, n.l.

(a)

Seker plaas 'Bandon' No. 634, distrik Hoopstad, groot 450 morge, 403 vk. roede; en

(b)

Sekere plaas 'Leclusa' No. 670, distrik Hoopstad, groot 555 morge, 599 vierkante roede;

onderworpe aan die voorbehoud ten gunste van my, Jan Johannes Nel, van al die regte tot minerale soos omgeskryf in sekere Prospekteerkontrakte gedateer 30 Desember 1943 in naam van Rooderand Main Reef Mines Beperk, te koop vir die som van agt-en-twintigduisend tweehonderd nege-en-negentig pond (£28,299) betaalbaar in kontant teen registrasie van transport op naam van die kopers, of hul plaasvervangers, 'n goedgekeurde bankwaarborg vir die koopsom sal aan verkopers verskaf word een maand na opsie uitgevoer word.

Hierdie opsie sal van krag bly vir 'n periode van een maand vanaf datum.

Geteken te Theunissen op hierdie 7e dag van Mei, 1946.

	p.p. M. M. J. C. ESTERHUIZEN.
As getuies:
1. (Illegible.)	(Sgd.) J. J. NEL.
2. H. E. P. CILLIERS.	(Sgd.) J. J. NEL.
En geteken te Klerksdorp op die	dag van Mei 1946.
As getuies:

Davis AJA

1.
	Bygestaan deur
2.
	Haar eggenoot.'

At the foot of the document the following words were added:

'The above option is hereby accepted by me pursuant to a cession made in my favour this day.

Dated at Johannesburg this 6th day of June, 1946.

(Sgd.) I. HERSCH.

The defendant excepted to the declaration as disclosing no cause of action. VAN DEN HEEVER, J., held that the option was not capable of cession and he consequently allowed the exception with costs. The plaintiff now appeals.

I shall deal first with the question whether an option can be ceded. An option has been analysed into an...