What happened
Ilcor Engineering Services agreed to build three specialised trailers for Crossmoor Transport under two agreements. It completed two four-axle trailers and began building a five-axle one. Crossmoor neither paid for nor collected the completed trailers and did not pay the agreed 50 per cent deposit on the five-axle trailer. Ilcor treated that as a repudiation and sued for damages and storage costs.
The trial court found the agreements enforceable and gave Ilcor its damages and storage costs. The Full Court reversed it entirely: payment of the deposit or the furnishing of a guarantee, it held, were suspensive conditions, neither had happened, and so the agreements had never come into effect. Ilcor's claims were dismissed.
What the court held
In Close Trade 200074 CC t/a Ilcor Engineering Services v Crossmoor Transport (Pty) Ltd [2026] ZASCA 134, handed down on 5 October 2026, the Supreme Court of Appeal upheld Ilcor's appeal with costs, set aside the Full Court's order and replaced it with an order dismissing Crossmoor's appeal to that court with costs.
The security provisions entitled Ilcor to insist on the deposit or a guarantee before it started manufacturing. They did not stop Ilcor from going ahead without first insisting on that security. They regulated the parties' obligations on payment and security under agreements that were already concluded. They were not suspensive conditions.
On the storage costs, the trailers took up space on Ilcor's manufacturing premises and the loss of use was a direct consequence of Crossmoor's breach, not too remote. Crossmoor had not shown that Ilcor acted unreasonably in keeping the trailers while trying to sell them instead of dismantling them. The trial court was right to award storage costs until the four-axle trailer was sold and, for the five-axle trailer, until judgment.
What it means for your practice
The judgment draws the line that commercial litigators argue about constantly. A suspensive condition keeps the contract from coming into operation until an uncertain future event occurs. A payment or security term tells a party what it must do under a contract that already binds. A clause that says the manufacturer may require a deposit or a guarantee before starting work is the second kind, and a buyer who withholds the deposit cannot then say there was never a contract to breach.
For the supplier's attorney, this is the answer to the "no deposit, no contract" defence: the right to insist on security is the supplier's to exercise or waive, and starting work without it does not undo the agreement. It also confirms that a buyer who will not pay and will not collect has repudiated, and that the cost of housing the refused goods while a replacement buyer is found is ordinary, foreseeable damage.
For the buyer's attorney, the lesson is in drafting. If the client genuinely wants no obligations until the deposit is paid, the clause has to say so in the language of condition: that the agreement will not come into force unless and until payment is received by a stated date, with the consequence of non-fulfilment spelt out. Words that merely give the other side a right to insist on payment first will not do that work.
For anyone defending a storage or holding-cost claim, the mitigation argument has to be proved. The buyer here could not show that keeping the trailers and trying to sell them was unreasonable compared with breaking them up, and so the costs ran to sale and to judgment.
What to do on your files
Pull the precedent agreements your commercial clients use for manufacture, supply and custom work. Where the client intends a true condition precedent, redraft the deposit clause as one; where the client wants the right to insist on security but keep the contract alive, leave it as a term and make sure the client knows the difference.
On any pending claim where the defendant pleads that an unpaid deposit prevented the contract from arising, read the clause against this judgment before conceding anything.
Where your client is holding goods a buyer has refused, keep a dated record of the storage, the space occupied, and the efforts to sell. That record is what turned the storage claim here into an award that survived two appeals.
This note is drawn from the Supreme Court of Appeal's own media summary, which does not form part of the judgment; read the judgment before relying on it.
Source: Close Trade 200074 CC t/a Ilcor Engineering Services v Crossmoor Transport (Pty) Ltd (1553/2024) [2026] ZASCA 134, Supreme Court of Appeal, 5 October 2026. The court's media summary: https://www.supremecourtofappeal.org.za/images/SCA2026-134ms.pdf
