Authored by Patrick Bracher.
In March 2025 the Supreme Court of Appeal confirmed that, if at the time of liquidation there is an executory contract running, the liquidator must elect whether to abide by its terms and complete the contract or to repudiate the contract within a reasonable time.
At the time of liquidation, the company was party to a master rental agreement against which a third party had to pay R769 000 against the company passing ownership of the relevant trucks to the third party. Upon liquidation, in terms of insolvency law, the liquidator was required to elect whether to abide by those agreements and complete them or repudiate them. If a liquidator elects to abide by a contract which has reciprocal obligations, and the liquidator attempts to enforce the agreement, the other party may raise the defence that performance by the company in liquidation has not happened nor been tendered in full. The liquidator failed in an attempt to enforce payment from the third party because the liquidator had not tendered performance of the liquidated company’s reciprocal obligations and there was no valid case in law for claimed payment.