The Consumer Protection Act, 2008 (the CPA) is coming into force on 31 March 2011. It will have a significant effect on the supply of goods and services. The act will also regulate the relationship between suppliers and consumers in detail.
One of the most controversial provisions of the CPA relates to the liability of suppliers. If someone supplies goods, and those goods cause harm to the consumer, the supplier will be liable for the harm. This will be the case even if the supplier was not negligent. Further, all parties in the supply chain can be held liable by the consumer. This includes the manufacturer, the wholesaler and the business that sells the goods to the public.
Suppliers must also take note of the standard warranties that will apply to goods supplied to consumers. These warranties cannot be excluded. When the CPA is in force, consumers will have the right to receive goods that:
• are reasonably suitable for the purposes for which they are intended;
• are of good quality, in good working order and free of any defects;
• will be useable and durable for a reasonable period of time, having regard to certain factors; and
• comply with any applicable standards set under the Standards Act, 1993.
The CPA also deals with the marketing of goods. Consumers will have the right to restrict unwanted direct marketing (this will include promotional e-mails and telesales). Further, if a consumer bought goods as a result of direct marketing, the consumer will be entitled to cancel the sale of those goods within a specified period.
A supplier will have to ensure that its packaging and/or labelling complies with the CPA’s requirements. The Minister of Trade and Industry will prescribe certain information or descriptions that must be applied to specific goods. In addition, the CPA has strict requirements relating to the disclosure of the price of goods. If goods are displayed for sale, the supplier must also display the price of those goods at the same time.
When it comes to promotional competitions, suppliers will in future have to ensure that they follow the provisions of the CPA in this regard. For instance, the CPA contains certain requirements regarding the rules of promotional competitions. It also regulates the consideration payable by consumers for entering into competitions.
Another important aspect of the CPA relates to business names. In future, a supplier will not be able to trade under a name, unless:
• in the case of an individual, that name is displayed in his or her identity document;
• in the case of a juristic person (e.g. a company), the name is registered; or
• name is registered in terms of the process prescribed by the CPA.
These issues are just some of those that are dealt with in the CPA. It is important for all businesses to make sure that they are ready for the CPA. They will have to take steps to mitigate their risks against the CPA’s strict liability provisions. In addition, the wording of standard documentation should be checked for compliance with the act.
Written by Danie Strachan at Adams & Adams Attorneys. Contact: firstname.lastname@example.org.