Suretyship agreement – Defence of
mistake
In Voltex (Proprietary) Limited v Super Team
Electrical (Proprietary) Limited t/a Electric World and others [2015] JOL 33416 (KZD),
the court had to determine if the Respondent’s defence was valid.
In a written credit application to
the applicant, the Respondent bound himself as surety and co-principal debtor in
solidum with Super Team. Although admitting having signed the credit
agreement, the surety argued that he was not bound by a suretyship document,
because he signed it by mistake and without any intention to incur contractual
liability. He further averred that he did not read the document when he signed
it.
The court found that the
respondent’s mistake in this case was a unilateral one. Having regard to the
nature of the agreement signed by the respondent and the clear wording thereof,
there could be no doubt that the respondent knew what he was signing. The
document was clearly recognisable as a suretyship undertaking. By affixing his
signature to the document, the respondent had effectively assented to the terms
contained therein unless he could show that he was fraudulently deceived by the
applicant into signing it. No such fraud was established. The Court held that
the legal maxim “caveat subscriptor” found application herein and the
respondent was bound to the terms contained in the agreement.
On that basis, the court described the
defences raised by the Respondent as fictitious, far-fetched and untenable, and
granted judgment in the applicant’s favour.
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