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Since early 2011, the Consumer Protection Act ("CPA") has codified the SA consumers' rights and obliges suppliers to change their way of doing business so that the consumer has improved chances of not being waylaid. Successful retailers had already accepted that the consumer was king and have gone the extra mile to keep the consumer happy with generous trading terms.
The old Roman principle caveat emptor or "buyer beware", has long been an established element of commercial transactions in South Africa. Basically, it means that the buyer takes the risk and has to check whether he is happy with the goods before purchasing. Any dissatisfaction with the goods afterwards, remains that of the purchaser, who has no recourse, except in exceptional circumstances.
Successful retailers have accepted that the consumer is king and have gone the extra mile to keep the consumer happy with generous trading terms; in many cases even contrary to their express terms of sale and the seller’s rights in common law. These retailers voluntarily take back goods and reimburse the consumer for reasons completely inadequate in law, for example, when items do not fit, do not match the décor or were already used by the consumer. Retailers are also known to make good on misleading statements without quibble, such as selling goods at the displayed, but incorrect price, and giving another one free for the inconvenience caused by the confusion!
Since early 2011, the Consumer Protection Act ("CPA") has codified the SA consumers' rights and obliges suppliers to change their way of doing business so that the consumer has improved chances of not being waylaid. Sharp operators will have to watch out; those who in the past shifted more of the risk onto the purchaser, for example, contracting a "voetstoots" clause against liability for latent defects, limiting their liability for damage caused by defective goods sold, using small or fine print, effectively illegible, for onerous deal terms, extracting admissions of fact from clients, or devising quaint pre-estimated penalties through notices such as "lovely to look at, lovely to hold, but if you break it, consider it sold", will have to check that their conduct is CPA compliant.
The CPA requires, amongst others, proper disclosure of information, fair and responsible marketing and dealing, trading on just and reasonable terms and conditions, offering fair value, good quality and safety, and accounts to the consumer in certain circumstances.
The CPA aims, amongst others, to promote fair business practices and especially protect disadvantaged and vulnerable consumers, such as the poor, young, aged and illiterate, but in the process the more savvy customer is also covered. The CPA rules apply to all consumer transactions, not only purchase and sale, but excluded are, for example, money-lending transactions, which are controlled under the National Credit Act.
What the CPA does not do is revoke the principle of "buyer beware". A supplier of goods can still protect himself by limiting liability or risk, but only in a manner that is clear, conspicuous and timely as prescribed by the CPA. For example, if a supplier informs the consumer of the substandard condition of defective goods and the consumer expressly agrees to purchase the goods in that condition, the deal cannot be invalidated only because the goods are defective to the extent disclosed.
Importantly, the CPA does not turn retailers’ goodwill response to consumer capriciousness into consumer rights. Under the CPA there is still little room to legitimately demand the return of goods purchased or refund on the basis that the items are no longer needed, or are of the wrong colour. The consumer is only entitled to purchase safe, good quality items, which are reasonably suitable for their generally intended purpose, in good working order, free from defects, durable and which meet regulated standards.
But a retailer or supplier must know all 122 sections and 2 schedules of the CPA as well as the regulations promulgated thereunder and should have in the more than eighteen months since the CPA’s coming into effect, complied with the myriad of prescribed requirements for trading in the consumers’ interest. Retailers ignore the rules at their own peril and cost; a risk is that an administrative penalty up to 10% of the firm's annual turnover, can be imposed for conduct contrary to the CPA.
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Petra Krusche is a director in Cliffe Dekker Hofmeyr's Competition practice. She is involved in all aspects of that field of law and has gained a good understanding of the FMCG sector through work for firms in FMCG retail and supply.... VIEW MY PROFILE |
