''MacDuff & Co Ltd (in Liquidation) v Johannesburg Consolidated Investment Co Ltd''1924 AD 573. is the leading case in

South African contract law South African contract law is "essentially a modernized version of the Roman-Dutch law of contract",Du Plessis, et al. p.11. and is rooted in canon and Roman laws. In the broadest definition, a contract is an agreement two or more parties enter ...

on the issue of fictional fulfilment of suspensive conditions.

Facts

The case involved two companies: Johannesburg Consolidated Investment (JCI) was a minority shareholder in Macduff & Co. JCI had entered into a contract with Macduff whereby the latter would undergo voluntary

liquidation Liquidation is the process in accounting by which a company is brought to an end in Canada, United Kingdom, United States, Ireland, Australia, New Zealand, Italy, and many other countries. The assets and property of the company are redistrib ...

. Macduff agreed that, once liquidated, it would transfer all its assets into a newly founded company under the auspices and supervision of JCI. In the agreement was a suspensive condition which permitted liquidation only if the shareholders of Macduff agreed to it. At the time of

contract A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tran ...

ing, this was a promising deal for JCI. When market conditions changed, however, it was no longer of much economic benefit. JCI accordingly bought up shares in Macduff, until it was the majority shareholder, and then voted against liquidation, deliberately obstructing the possibility of the occurrence of the suspensive condition in the contract.

Judgment

The Appellate Division ruled that such obstruction was unlawful, and therefore that there was fictional fulfillment of the suspensive condition. JCI was thus held liable for

breach of contract Breach of contract is a legal cause of action and a type of civil wrong, in which a binding agreement or bargained-for exchange is not honored by one or more of the parties to the contract by non-performance or interference with the other party ...

References

Books

* Du Plessis, Jacques, ''et al''.
The Law of Contract in South Africa
'. Edited by Dale Hutchison, Chris-James Pretorius, Mark Townsend and Helena Janisch.

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Cases

* ''MacDuff & Co Ltd (in Liquidation) v Johannesburg Consolidated Investment Co Ltd'' 1924 AD 573.

Notes