GIBS Forum on new Consumer Protection Act

Posted on September 02, 2011

The new Consumer Protection Act (CPA) takes a sophisticated approach to consumer rights and puts the obligation on suppliers first. Consumers only have to show that they are entitled, said Neil Kirby, Werksmans director, at last night’s GIBS Forum on the Future of Contracting.

In order to apply the Act and enter into a valid contract one must understand the concept of the “vulnerable consumer” as the purpose of the Act is to address the gap between powerful suppliers and the ordinary man on the street. “This Act stands with the vulnerable consumer, it (vulnerable consumer) is the new benchmark for the way in which contracts are interpreted,” said Kirby.

The implication is that where a contract is in place, it will be interpreted in favour of the consumer in case of a dispute that goes to court or the ombudsman. “There is no longer a neat shield around the supplier,” he added.

In terms of exceptions to the CPA, the threshold exceptions are the most important. It says that if someone has a turnover exceeding R2m the person is not a consumer but will be dealt with in the ordinary course of business.

Importantly, the Act does not allow the use of difficult language in contracts that allows suppliers to avoid liability, but requires the use of “plain and understandable” language in contracts. This requirement goes to what the vulnerable consumer is and revolves around the person’s inability to understand what they are doing, said Kirby.

This section will either lead to the disappearance of “legalese” or will be replaced by a different language the CPA says must be in a contract.

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