The Consumer Protection Act 68 of 2008 (the “CPA”) came into effect on 1 April 2011 and it provides significant protection to the consumer, but what does this mean for the supplier?

The CPA applies to every transaction in the Republic (barring the few exclusions) where transaction is loosely defined as 'in respect of a person acting in the ordinary course of business, an agreement for the supply or potential supply of goods or services, whether to such person, or at their direction.' The CPA defines consumer (any person / juristic entity to whom goods and services are marketed; users of goods or services; franchise agreements), goods (anything marketed for human consumption; any tangible object, any literature i.e.: music, photographs, movies etc; a legal interest in land or any other immovable property, and gas, water and electricity) and services (basically any work or undertaking performed by one person for the direct or indirect benefit of another)

The CPA extensively covers the rights of the consumer insofar as the relate to the following: the Right to Equality in the Consumer Market; the Consumer's Right to Privacy; the Consumer's Right to Choose; the Right to Disclosure and Information; the Right to Fair and Responsible Marketing; the Right to Fair and Honest Dealing; the Right to Fair, Just and Reasonable Terms and Conditions; the Right to Fair Value, Good Quality and Safety; and Supplier's Accountability to Consumers.

The CPA places obligations on the supplier within these rights and further prohibits the parties from contracting out of the CPA, the rights it provides the consumer, the obligations it provides the supplier and the effect the CPA has in general. Parties to a fixed term contract (where the consumer is an individual) cannot exceed 24 (twenty four) months. These fixed term contracts can also be cancelled with 20 (twenty) business days notice with a reasonable cancellation fee following. Further the consumer is provided with a 5 (five) day cooling off period in which he/she may rescind the contract without penalty. This may have severe consequences on the supplier especially where the supplier has already performed in part or in full. Prepaid certificates, credits and vouchers are valid for 3 (three) years and will not be permitted to expire before then. In addition, companies will be required to register their trade names. Companies will no longer be entitled to register a shelf company and trade under a different name. This creates great administrative burden on companies.

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Written and prepared by
Lauren Hastie
BOUWER KOBELI MORABE

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