Consumer Protection Act – Unfair contractual terms
31 Mar 2021
Fairness of contracts and the interpretation of such fairness has been a long-standing debate in South African contract or consumer based law.
Be that as it may, the Consumer Protection Act 68 of 2008, as amended (hereafter “CPA”) has made provision for certain mechanisms and obligations which should allow for the principle of fairness in consumer agreements to prevail.
One of the main protective mechanisms in the CPA in respect of fairness would be the provision of the right to fair, just and reasonable terms and conditions.1 The aforementioned right specifically precludes suppliers from entering into agreement or supplying goods and services where:
- A price is unjust, unreasonable or unfair, and/or
- Where the terms of an agreement are unjust, unreasonable or unfair.
The right further precludes, marketing, negotiation and administration of transactions by a supplier in a manner that is unjust, unfair or unreasonable and indicates that a supplier may not request that a consumer waive a right, waive liability of a supplier or assume an obligation on terms that are unjust, unfair or unreasonable.
Further to the above, Section: 49 of the CPA provides for the instances in which a seller bears the obligation of bringing a consumer’s attention to certain clauses within an agreement or notice.2 Section 49 indicates that where an agreement or notice contains the following clauses, the consumer must be informed of such clauses in plain language as described in Section: 22 of the CPA and, must be given the opportunity to receive and comprehend the clause or notice:3
(a) A Clause which limits in any way the risk or liability of the supplier or any other person;
(b) A Clause which constitutes an assumption of risk or liability by the consumer;
(c) A Clause which imposes an obligation on the consumer to indemnify the supplier or any other person for any cause; or
(d) A Clause which would be an acknowledgement of any fact by the consumer.
The CPA also provides that the above obligation also applies where an agreement refers to an activity of facility which:4
(a) Is of an unusual character or nature;
(b) The presence of which the consumer could not reasonably be expected to be aware or notice, or which an ordinarily alert consumer could not reasonably be expected to notice or contemplate in the circumstances; or
(c) That could result in serious injury or death.
Other provisions within the CPA in respect of fairness indicate that consumers have the right to obtain free copies of agreements, to refuse prohibited terms or transactions and the right to approach a court to ensure fair and just terms and conditions.5
The principle of contractual fairness was once again highlighted in the case of Beadica 231 CC and Others v Trustees for the time being of the Oregon Trust (CCT109/19)  ZACC 13 (hereafter the “Beadica Case”).
In the Beadica Case, a rental agreement contained a clause which required the Applicants in the case to give written notice to their lessor of their intentions to renew the lease. They did not give notice of their intentions within the prescribed periods of their lease agreements and the Respondents sought the agreements cancelled.
The court of first instance concluded that strict adherence to the aforementioned clause would be against public policy and it made a finding in favour of the Applicants. However, the matter went to the Supreme Court of Appeal which ruled on the principle of “sanctity of a contract” and found in favour of the lessors.
The matter then went to the Constitutional Court where it was argued that strict adherence to the agreement would be against public policy. The Constitutional Court reinforced that a court may refuse to enforce contractual terms where the terms are unfair, unjust or unreasonable and contrary to public policy. However, the court found that the Applicants failed to show that enforcement of their contractual provisions will be contrary to public policy (majority judgment).
Even though the court did not find in favour of the Applicants in the Beadica Case; the case went a long way in reinforcing the courts role in the enforcement of contractual provisions. This role is echoed in a consumer’s right to approach a court to ensure fair and just terms and conditions.
In as much as the aforementioned rights exist and in as much as suppliers remain obligated in respect of the CPA; it is important that consumers exercise caution when entering into contractual arrangements, especially when there is high financial risk.
Scrutiny of contractual provisions is always advised and it may be in a consumer’s best interest to seek legal assistance when entering into complicated contractual arrangements.
Contact an Attorney at SchoemanLaw for your contractual and consumer based needs.
References: The Consumer Protection 68 of 2008 as amended, Section: 48.
 The Consumer Protection 68 of 2008 as amended, Section: 49 (1) – 49 (2).
 The Consumer Protection 68 of 2008 as amended, Section: 49 (1).
 The Consumer Protection 68 of 2008 as amended, Section: 49 (2).
 “I Know My Rights. Do You Know Yours?” Department of Trade and Industry, www.westerncape.gov.za Accessed on 28 February 2021.
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