Contracts lie at the heart of everyday business dealings. They create expectations, define responsibilities, and set the tone for the business relationship. But what happens when one party claims that they don’t have to perform because you didn’t perform first?
Source: AI-generated image created by Gemini
In South African law, this defence is referred to as the exceptio non adimpleti contractus. It is a powerful defence but, as the recent judgment of Laser Logistics (Pty) Ltd v Waltex (Pty) Ltd illustrates, should be used with caution.
Handed down by the Western Cape High Court on 21 November 2025, this case offers guidance on the use of this defence and reinforces the importance of honesty, transparency and accountability in contractual relationships.
Background
Laser Logistics (Laser) entered into a written credit agreement with Waltex in February 2016 in terms of which Laser would provide logistics services and extend a R300,000 credit facility. Waltex, in turn, was obliged to pay all invoices within 30 days of presentation.
Within the first 12 months, Waltex began falling behind on its payments. Despite receiving ongoing services from Laser, the arrears steadily grew over time and by June 2024, Waltex was over R2m in arrears.
To address arrears, the parties concluded a further agreement whereby Waltex would make weekly payments to reduce its debt, the credit facility would remain in place, services would be provided on a cash-on-delivery basis, payable within 24 hours of presentation of invoice and failure to make timeous payments would result in the entire outstanding amount becoming due and payable.
Bradley Workman-Davies 18 Feb 2026 Waltex, after defaulting on more than one further occasion, requested indulgence from Laser, which was granted.
After the period of indulgence had passed without payment, Laser, so it is contended, advised Waltex that it would resume services provided that a lumpsum payment was made by 4 November 2024 and the parties concluded an acceptable acknowledgement of debt. Although Waltex committed to settle the debt, it declared that it was unable to commit to a repayment agreement.
On 6 November 2024, Laser proposed alternative payment terms, however, this proposal was not accepted and on 3 December 2024, Laser demanded that the entire outstanding amount be paid within three weeks. Waltex did not deny being in arrears but attempted to escape liability by raising several legal defences.
Legal defences
Novation
Waltex contended that the subsequent payment arrangements amounted to a novation of the original credit agreement. The original agreement provided that condonation of any breach would not be construed as a novation and in light thereof, and the facts of the case, the court found that the subsequent agreement did not replace the original credit agreement.
Exceptio non adimpleti contractus
In simple terms, the defence of exceptio non adimpleti contractus (exceptio) allows a party to a reciprocal contract to withhold their performance until the other party has performed or is ready to perform its corresponding obligation.
Waltex contended that Laser’s obligation to deliver services to Waltex on a cash-on-delivery basis and Waltex’s obligation to make payment under the payment agreement were reciprocal. As such, so Waltex contended, Laser was not entitled to payment by Waltex of the amount in arrears because Laser had failed to perform the services and did not tender to perform them.
The court disagreed with Waltex and stated instead that reciprocity existed in the amended agreement to the extent that Laser agreed to provide services on a cash-on-delivery basis. Waltex’s obligation to pay therefore arose upon delivery.
Regarding the arrears, the court explained that Laser had rendered services to Waltex, but that Waltex had not fulfilled its payment obligations in respect thereof, adding that the exceptio cannot be used to withhold payment for services already received or to demand continued services while in breach, or as a shield against liability for past breaches.
The court noted that readiness to perform was a pre-requisite for this defence and because Waltex explicitly stated that it was not in a financial position to pay for even the cash-on-delivery based services, Waltex’s reliance on the exceptio was misplaced.
In light of the above, the court held that Laser’s refusal to continue rendering services was not a breach by Laser of its obligations but a lawful exercise of its rights under the principle of reciprocity.
Xola Njengele and Jaime-Lee Jacobs 17 Dec 2025 Incorrect amount
The credit agreement provided that a certificate would be prima facie proof of the amounts stated therein. The court was satisfied that Laser had provided reliable and sufficient evidence, and noted that Waltex, despite challenging the amount, did not provide a credible alternative calculation or rebuttal. Waltex’s challenge on this point, therefore, failed.
With all defences dismissed, the court granted judgment in favour of Laser for the full outstanding amount, together with interest and costs on an attorney and client scale.
Closing remarks
The judgment in Laser Logistics (Pty) Ltd v Waltex (Pty) Ltd is instructive for several reasons.
It provides clear parameters for the use of the exceptio defence, provides guidance on the circumstances under which a suspension of services is a legitimate exercise by a creditor of its rights, rather than a default of its obligations of reciprocity and highlights the importance of record-keeping.
In corporate litigation, technical defences can be as potent as the claim itself. They can shut the case down before the merits are ever heard, turning procedure into a decisive battleground.
The lesson for companies is simple, procedural compliance with contracts is not just a formality, but a core part of risk management. At the same time, courts must continue to police the line between legitimate reliance on technical defences and their tactical misuse, ensuring that procedure serves justice rather than defeats it.
