2. HONOURING OF UNDERTAKINGS

2.1. Undertakings are asked and given freely between co-operating colleagues in
order to facilitate registration of transactions. A practitioner is not compelled to give, or to accept, an undertaking in any matter. It is established practice, and widely accepted,that attorneys facilitate registration of transactions by giving undertakings to make a payment against the happening of certain future events. It is a long established practice in the Cape Town Deeds Registry for trust cheques to be exchanged on the morning of registration, pursuant to undertakings given in transactions. The practice relies, for its continued existence, on the integrity of the participating practitioners and their adherence to professional standards. The Northern Provinces do not have a similar practice, but reference is made to indicate the measure of good faith amongst the Cape conveyancers.

2.2. An undertaking can be qualified to be revocable. Revocable undertakings
should not be given lightly. An attorney who gives a revocable undertaking is professionally bound to honour the undertaking if reliance has been placed on it, irrespective of changes in the circumstances of the client on whose behalf the undertaking was given. Many conveyancers have found that the insistence on unconditional, irrevocable undertakings poses too high a risk or obligation on the attorney requested to furnish it. This may result in a situation where the attorney refuses to give an undertaking and gives a bank guarantee, with commensurate costs for the client and inconvenience for the attorney demanding the undertaking.

2.3. Revocable undertakings (and undertakings that are not stated to be
irrevocable) can be revoked but ethical considerations apply where the party in whose favour the undertaking has been issued has already acted on the strength of such undertaking.Revocation should be made timeously and the party who has acted in reliance on the undertaking should be given the opportunity to restore the status quo ante.

2.4. Care should be taken in drafting undertakings. Attorneys issuing undertakings
should be aware of the application of the 'reliance theory' pursuant to which the substance of an undertaking may take precedence over its form. Reference in this regard should be made to Ridon vs Van der Spuy & Partners(Wes Kaap) Inc 2002(2) SA 121(c) in which it was held that an undertaking by the defendant firm of attorneys to pay 'on behalf of' its client was properly construed as a personal undertaking of the firm and not that of the client. For example, the attorney for a judgement creditor uplifts an attachment over immovable property on the strength of an undertaking furnished by the transferring attorney. Should the latter, at any stage, exercise the right to revoke the undertaking, professional ethics require that the attorney for the judgement creditor be advised timeously and given proper opportunity to restore the position ante: ie, to re attach the property, alternatively, to obtain new instructions. An attorney who furnishes an undertaking to gain a specific advantage and then withdraws the undertaking without permitting the other party to re affirm its rights, will be exposed to complaints to, and inquiry by, the Society for acting unprofessionally, in addition to other civil remedies of the offended party.

2.5. An undertaking may be conditional or unconditional. Care should be taken to
disclose any relevant conditions upon which payment is dependent and to disclose any circumstances that might influence the acceptance of the undertaking. For example, if an undertaking is given to pay over the net proceeds of a sale on transfer,the existence of an unfulfilled suspensive condition at the time of giving the undertaking should be specifically disclosed.

2.6. Undertakings should not be given lightly, should not be misleading and should
be given only once the financialdetails of the underlying transaction have been established.
For example, where the amount owing in respect of a bond over the property exceeds the sale price,an undertaking to pay the net proceeds of the sale is misleading.

2.7. The onus of collecting bond costs is generally that of the attorney attending to
the registration of the bond.However, where bond registration costs are included in the purchase price of a property, convenience may dictate that the costs are deducted from the proceeds of the bond before the net proceeds are paid to the transferring attorney. If this is the case, any undertaking to pay the proceeds of a bond to the transferring attorney should make it clear that costs are to be deducted. This should be communicated in good time to enable the transferring attorney to plan the financial aspects of the transaction timeously. To summarise The continued acceptance by conveyancers of undertakings as a useful means of facilitating transactions is dependent on the honouring by them of their legal and professional obligations. Care must be taken in the calculation, and the wording, of the undertaking, as other parties will rely and act thereon. An attorney may be held to the letter and intent of an undertaking and is, accordingly, at risk of civil action and/or a complaint of unprofessional conduct.