Ekurhuleni Metropolitan Municipality v Business Connexion (Pty) Ltd [2025] ZASCA 41

Let’s consider the case of Ekurhuleni Metropolitan Municipality v Business Connexion (Pty) Ltd [2025] ZASCA 41.

Client personas this case summary is for

• 🧠 CIOs and IT decision-makers in government or enterprise settings negotiating tech procurement
• ⚖️ In-house counsel navigating risk in ICT contracts
• 📊 Policy advisors and procurement officers under pressure to innovate within budget constraints

The case in a nutshell

When Ekurhuleni Municipality commissioned R85 million worth of Oracle software via Business Connexion (BCX), they thought they had a flexible arrangement. But when budget constraints kicked in, they tried to cancel—arguing the licences weren’t delivered and weren’t needed immediately. The courts didn’t buy it.

What happened

• BCX was lawfully appointed and confirmed as a supplier through a standard public procurement process.
• On BCX’s instruction, Oracle delivered licence keys and a welcome pack by email.
• The Municipality later tried to cancel, citing revenue losses due to COVID-19—not once mentioning non-delivery or delayed execution in their cancellation letter.
• The High Court ruled in BCX’s favour.
• The Municipality’s request for reconsideration under section 17(2)(f) of the Superior Courts Act was struck off by the Supreme Court of Appeal.

Key takeaway for CIOs and legal teams

Once a contract is executed and relied upon, you can’t retroactively claim it was conditional—especially if your only reason for cancellation is budget pressure.

Strategic lessons from the bench

1. A contract is a commitment, not a wishlist: Too many tech leaders treat contracts as if they’re aspirational documents. This case reminds us that a signed instruction to perform work—followed by supplier fulfilment—is binding, even when financial forecasts change.
2. “Non-delivery” is a legal argument, not a vibes-based feeling: The Municipality’s argument of non-delivery fell apart when Oracle proved they sent the licence pack by email. Bare denials don’t hold up in court. Your legal team must help procurement define what actual delivery looks like from day one.
3. Public sector buyers must stop treating private vendors like banks: BCX paid Oracle upfront. When the Municipality tried to cancel, BCX was left carrying an R85m liability. Courts are making it clear—vendors are not there to absorb your budget risk.
4. Timing and contingencies need to be explicit: If you only want to trigger payment or delivery once infrastructure is upgraded or budgets confirmed, you must put that in the contract. Hints in RFQs or emails won’t cut it.

ITLawCo’s insight

We help legal and IT teams co-design procurement contracts that move at the speed of innovation while protecting you from costly misunderstandings. Whether you’re acquiring cloud, AI, or enterprise software—our contracts anticipate the “what ifs” so your organisation isn’t left footing the bill when things change.

If you’re rethinking how your organisation buys and implements tech, let’s talk. Contact us today.

Read the case.