November 25, 2005
Parol Evidence in South Africa
A surety who believed he had a prior oral agreement that his liability would be limited but who nevertheless signed an unlimited surety agreement, was entitled to claim the benefit of the earlier oral agreement, according to a recent decision by the Cape High Court in South Africa, Davids and Another v. ABSA Bank Ltd. According to a report by Dawie Malan of Johannesburg’s Cliffe Dekker Inc., the court held that the bankers who presented the agreement to the surety failed to explain the unlimited nature of the liability, despite a recitation in the agreement that it had been explained.
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