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Do the T’s & C’s of your business comply with the Consumer Protection Act?

3rd May 2013

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The Consumer Protection Act 68 of 2008 (“Act”) sets out a range of fundamental consumer rights as well as ways to protect these rights. These rights however, place an obligation on each business owner to be aware of the implications of the Act and ensure that his standard terms and conditions of trade in particular are aligned with the requirements of the Act as otherwise costs can be incurred through transactions being cancelled, the owner having to perform more than was intended or even penalties possibly being incurred.

The Act aims to protect the rights of the consumer and to promote a marketplace that is fair, accessible and sustainable. The terms and conditions of trade of a business must therefore create such a marketplace for the consumer and each business owner must ensure that its terms and conditions are in line with the Act.

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The Act requires that these terms and conditions be made available to the consumer in plain and understandable language so that a consumer with average literacy skills can understand the information. Difficult and incomprehensible words and legal terms should be avoided to ensure that the terms and conditions are understandable to everyone. Any misleading use of language with the intention to deceive or confuse the consumer must be avoided.

All products supplied by your business are sold with an automatic warranty that the products are of good quality, free from any defects, safe and are reasonably suitable for the purpose for which they are sold. The consumer has the right to return a defective product or a product that does not meet the necessary standards required of that product. The consumer may return such a product within six months of the transaction for a replacement or repair of the product or a refund of the purchase price, and your terms and conditions may not contradict these provisions of the Act.

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Businesses are further obliged to make provision in their terms and conditions for the return and refund to the consumer of the purchase price, where:

  • The consumer rescinded the transaction during a cooling off period of five business days following the purchase or delivery of goods (whichever is the later) through direct marketing. In this instance the goods must be returned at the consumer’s risk and expense.
  • The products supplied are defective or not of the standard or description as agreed to or don’t satisfy the intended purpose. The goods must be returned within ten business days at the supplier’s risk and expense.

Direct marketing occurs where a consumer is approached, either in person or by mail or electronic communication, for the purpose of promoting or offering to supply goods or services to a person or to request a person to make a donation of any kind for any reason. The consumer then has the right to rescind the transaction by notice to the supplier within five business days after the later date on which the transaction was concluded or the goods were delivered. The Act also regulates how direct marketing should occur and how your standard terms and conditions must be used to obtain the consent of your clients for direct marketing purposes.

These above examples are the tip of the iceberg of the requirements for each business in respect of its terms and conditions. Each business accordingly requires careful scrutiny of their specific relationship to consumers in order to develop appropriate terms and conditions which match the business’s unique circumstances and to determine which transactions fall within the scope of the Act.

It is suggested that each business obtain legal assistance in scanning its current terms and conditions and business practices to determine which areas need to be addressed. This is vitally important as a consumer may contest the terms and conditions of your business and challenge the validity of the transaction. A consumer may also approach a court to declare specific provisions or the entire agreement between the consumer and the supplier invalid. Act now and ensure that your contracting environment provides a consumer with a clear and fair environment within which the consumer can purchase and contract with your business.

Written by Pauli Carshagen, Attorney, Phatshoane Henney Attorneys Commercial Department

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