A client poses a question to their attorney: My employment contract makes provision for deductions from my salary and now my employer wants to deduct money. What are the limitations in respect of deductions that can be made?

As a general point of departure, deductions can only be done once the employee has given written consent to such deductions. However, the employer is also entitled to deduct money when there is a legal obligation to do so, for example, in terms of a collective agreement, legislation, a court order or arbitration award. Deductions of employee’s salaries are regulated by section 34 of the Basic Conditions of Employment Act, 75 of 1997 (“BCEA”).

A typical scenario would be that the employment contract will contain a clause which provides that “the employer has the right to deduct from your remuneration any amounts due by you to the employer”. This amount can include, inter alia, any expenses the company has incurred on behalf of the employee; unauthorised expenses; expenses relating to the employee’s negligence, etc.

The deductions which employers can legally make includes tax deductions, contributions to the Unemployment Insurance Fund (UIF), union membership fees, medical aid, pension or provident fund contributions, any agreements with the employee to pay back debts, deductions in terms of garnishee orders, etc.

Employers acquire written consent for any other form of deductions. If the employment contract does not make provision for a deduction clause, the employer is then required to draft an additional agreement or make an amendment to the employment contract to make provision for such deduction. However, the employee needs to freely and voluntarily sign the said agreement or amendment.

What is significant to note in this regard is that before this deduction may be made, the employer has to comply with the following requirements: the loss or damages caused by the employee must have happened during the course of their employment; the employer must follow a fair procedure and the employee must be given a reasonable opportunity to show why the deduction should not be made; and the total amount of the deduction should not exceed the actual amount of the loss or damages. Therefore, in respect of this last point, it is important that the employer provides actual proof of the loss or damages in order to quantify the amount.

Furthermore, in a scenario where your employment contract contains a clause similar to the aforementioned example, employers tend to feel that these types of clauses give them unrestricted discretion to deduct monies. However, it must be borne in mind that section 34(2)(d) of the BCEA further restricts the amount which the employer may deduct to 25% (one-quarter) of the employee’s salary. Therefore, the employer is not allowed to subtract the full amount of damages/loss suffered from one deduction.

In conclusion, when signing an employment agreement, take note of whether there is a deduction clause contained in the employment agreement. Employers may want to make deductions during the employment, or alternatively once the employment relationship has ended. If your employment contract contains such a clause, it is important to be aware that these deductions can only happen in specific instances, if they are not governed by statutory law, a court order or any other written agreement.


This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)


Every person, whether an individual or a juristic person, will find themselves in a situation where they will want to terminate a contract. The aim of this article is to set out the requirements for terminating a contract as well as to give basic guidance when doing so.

When a person wants to cancel a contract, the cancelling party (innocent party) will have a choice to either cancel the contract or to enforce it. This article refers to the innocent party and the party in breach. The reader must however remember that fault it not a requirement for breach of contract.

The law regards breach of a contract as a wrongful act in itself which allows the innocent party to cancel the contract. It is important to remember that cancelling a contract is an extreme remedy that is only available in exceptional circumstances, namely where there is a cancellation clause or where the breach of contract is material or serious. If the contract is however silent on cancellation, the innocent party may still cancel the contract provided that the said breach is material or serious in nature.

The point of departure when cancelling a contract is to determine what the exact terms of the contract are, i.e. if the contract has a cancellation clause or not and whether there is a date of performance or not.

If the contract has a cancellation clause, the innocent party will be able to cancel the contract in the event of a breach of a term thereto. The innocent party must however take care not to cancel the contract incorrectly, otherwise the party in breach may interpret the cancellation as a repudiation of the contract, in which case the party in breach will also have the right to cancel the contract.

In the event where the contract does not have a cancellation clause, the innocent party will only be able to cancel the contract if the breach is material in nature. What constitutes a material breach depends on the terms of the contract. According to South African case law, a material breach is one which goes to the root of the contract and constitutes a breach of a vital term thereto.

Depending on the type of breach, the innocent party might have to give the party in breach notice of same. This will be the case where there is no date of performance specified in the contract. The innocent party must then demand performance by giving the party in breach reasonable notice to perform before he will be able to cancel the contract.

On the flip side, if a date of performance is specified in the contract, and a party does not perform in time and as stipulated, that party will be in breach, otherwise referred to as being in mora. It does however not automatically give rise to the right to cancel the contract. The only instance where there will be an automatic right to cancel a contract is if there is a cancellation clause or a suspensive condition in the contract.

A contract containing a suspensive condition will terminate automatically unless the suspensive condition is fulfilled or waived. If there is not a cancellation clause in the contract and no date of performance, the innocent party must give notice to the party in breach that time is of the essence and give him a reasonable time to perform.

In summary, the requirements for cancelling a contract vary according to the terms thereto, the type of contract and the factual scenario. There are no formalities for cancelling a contract unless the parties otherwise agree and/or a statute (i.e. Alienation of Land Act and the National Credit Act) prescribes same.

Other requirements include that the innocent party must give reasonable notice to the party in breach that they are cancelling the contract, which cancellation becomes effective from the time the cancellation comes to the attention of the party in breach.

The consequences of cancelling a contract are that the obligations to perform terminate and the parties are obligated to return what has been performed. If both parties agree to the cancellation, the preferred route would be to enter into a cancellation agreement, setting out what needs to be returned, claims for damages etcetera.

Considering that each contract and factual scenario differs and will be judged and interpreted accordingly, readers are advised to obtain legal counsel before cancelling a contract.

Reference List:

  • “Contract: General Principles” by Van Der Merwe, Van Huyssteen, Reinecke & Lubbe 2004 (Juta Law)

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)


This article looks at the continued relevancy of the employment contract in legal practice today. In 2014, the legislator amended section 186(1)(a) of the Labour Relations Act, 66 of 1995 (LRA), which deals with unfair dismissals, by removing the words “contract of” within the definition, leaving only the word “employment”. This gives the idea that the legislator accepts that the employment relationship goes beyond just the employment contract.

On being offered employment, not everyone tends to ask for an employment contract first, yet the employment contract is the first thing everyone turns to when the employment relationship turns sour. It was accepted that the contract of employment is the cornerstone of the employment relationship.  It links the employer and the employee in an employment relationship.

The initial idea was that the contract of employment regulates all aspects of the employment relationship. However, in practice this is not the reality. The employment relationship tends to go beyond just the contract of employment. This is because of statutory intervention, collective contracts, customs, and practices as well as common law implied terms which are often read into the contract. In terms of the section 186(1)(a) of the LRA, the old definition of dismissal was defined as the termination of the employment contract with or without notice. To accommodate the abovementioned factors, the legislator amended the section, expanding the definition of a dismissal to entail more than just the termination of the contract of employment.

This begs the question: do you need to sign an employment contract to be protected by labour legislation in South Africa?

The Labour Relations Amendment Act, 6 of 2014 (LRAA) changed the definition of dismissal in terms of section 186(1)(a) of the LRA. This means that the test for a dismissal will now hinge on whether employment or the employment relationship is terminated. This change from the contract of employment to just employment and/or employment relationship is also noticeable in section 186(1)(e) and (f).

So, what is meant by employment relationship? The contract of employment contains most of the terms and expected duties of both the employer and employee but it seldom happens that it covers the full spectrum of the employment relationship. Some obligations and rights are derived from a variety of sources, including the common law, collective bargaining, statutes, custom and practices, and in some instances, oral contracts between the employer and the employee. Other factors which may be taken into account, such as the employee’s obedience, care, economic dependency between the parties, fidelity, and the employer’s duty of care towards the employee, are not often referred to in the contract of employment. Initially, when employees entered into the contract, these rights and obligations may not have seemed as important but may have later turned out to be the core of a dispute. Therefore, there was a need for the concept to go beyond that of just the contract of employment, as it needed to cover the full scope of the practical realities of the workplace.

The world of work has changed over the years and employers always try to bypass labour legislation, which means that working arrangements may go beyond the employment contract and the protection provided for in labour legislation should also adapt. In Denel (Pty) Ltd v Gerber 2005 9 BLLR 849 (LAC) the court held: “In this regard it is important to bear in mind that a contract between any two persons may represent form and not substance or may not reflect the realities of a relationship…”

In State Information Technology Agency (SITA) (Pty) Ltd v CCMA & others 2008 7 BLLR 611 (LAC) the Labour Appeal Court also used the “reality test” to determine an employment relationship. In WL Ochse Webb & Pretorius (Pty) Ltd v Vermeulen 1997 18 ILJ (SA) 361 (LAC) the court highlighted that neither the employer nor employee benefit from the employment contract when it is “cast in stone”.

The legislator has now shifted the focus to the abstract relationship between the employer and employee, rather than just focusing on the contract between them. This amendment changes the entire idea we had about the employment relationship, even expanding the protection offered by labour legislation.

Reference List:

  • AC Basson, MA Christinason, A Dekker, C Garbers, PAK Le Roux, C Mischke & EML Strydom Essential Labour  Law 5 ed (2009).
  • A van Niekerk, MA Christianson, M McGregor & BPS Van Eck Law@Work 3 ed (2015).
  • A Rycroft & B Jordaan A Guide to South African Labour Law 2 ed (1992).
  • JAM Coyle-Shapiro, LM Shore, MS Taylor & LE Tetrick The Employment Relationship: Examining Psychlogical and Contextual Perspectives (2004).
  • Denel (Pty) Ltd v Gerber 2005 9 BLLR 849 (LAC).
  • State Information Technology Agency (SITA) (Pty) Ltd v CCMA & others 2008 7 BLLR 611 (LAC).
  • WL Ochse Webb & Pretorius (Pty) Ltd v Vermeulen 1997 18 ILJ (SA) 361 (LAC).

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)


If a person gives consent without acknowledging, understanding and considering their rights beforehand, is their consent legal and permissible in court? In eviction proceedings, it is questioned whether the granted eviction order may be cancelled after the unlawful occupiers had allegedly consented to it.

Occupiers of erven 87 & 88 Berea v Christiaan Frederick De Wet N.O.

A block of flats, Kiribilly, situated on erven 87 and 88 in Johannesburg was unlawfully occupied by 184 residents consisting of low income earners and unemployed occupiers, where some occupied the residence for a period of 26 years.

The said property was purchased from M L Rocchi, whose attorneys served the unlawful occupiers a letter notifying them of the termination of their right of occupation. The occupiers approached Mr Ngubane to speak on their behalf, and he confirmed with the court that the matter had been settled, as the respondents had been informed.

The High Court granted an order, which was allegedly agreed upon by both parties, to have the occupiers evicted from the property. The question is whether the order is bona fide based on the nature of the consent.


Contesting the order’s legal validity, the applicants submitted that, even if the consent was legally valid, the Court was under constitutional and statutory duties to provide that the eviction would be just and equitable.

Respondents submitted that the applicants failed to provide a defence as to the entitlement of remaining in occupation of the property, thus making the order just and equitable, as stipulated by Section 4(8) of the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act which says, “If the court is satisfied…that no valid defence has been raised by the unlawful occupier[s], it must grant an order.”

Validity of eviction order based on consent

For consent to be legally effective, it must have been given by the applicants freely and voluntarily with the full awareness of the rights being disregarded. Given that the applicants were not aware of their rights, the factual consent that they allegedly gave was uninformed, therefore not legally binding. Because all information with regards to the conditions of the occupiers was not presented to the courts, the consideration of all relevant factors is disabled, rendering the order invalid. Above all, no information was given as to where the unlawful occupiers would go after the eviction.


In a matter where there is a person claiming to speak on behalf of illegal occupiers in a court appearance, any agreement that s/he has made is not binding to the occupiers because s/he is not the legal representative, nor an occupier. Any statements he makes in court are legally inconsequential, and thus nullified as giving informed or legal consent.


  • Occupiers of erven 87 & 88 Berea v Christiaan Frederick De Wet N.O. [2017] ZACC 18

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)


Many industries may sometimes require their employees to work irregular hours. Employers within these industries, also known as “24/7″ industries, have somehow developed the notion that they are “different” from any other industries.

The Basic Conditions of Employment Act, and The Code of Good Practice, explain the criteria for this important aspect of employment. It is vitally important that employers are familiar with the Act and know what its implications are.

What does the Act say?

According to the Act, no employee may work more than 45 hours per week during normal work times. Furthermore, no employee may work more than 10 hours per week overtime. This applies irrespective of what industry you are in, because the act does not differentiate between different types of industries or employment environments.

The only document that may bring about a different condition would be a sectoral determination, or perhaps a Main agreement or collective agreement.

  • The idea of a “24/7” industry is irrelevant – the law remains the same. Furthermore, the Act provides for a daily rest period of 12 consecutive hours between finishing work and recommencing work.
  • Employers who allow “days off” to compensate for additional hours worked must realise that these “days off” cannot be taken from the employee’s annual leave.

Working on the weekend

If the employee’s normal shift falls on a Sunday, then he/she must be paid 1,5 times the normal wage rate for that work, and if the normal shift does not fall on a Sunday, but they are required to work that Sunday, then they must receive double the normal wage rate for the day.


It is clear that it is unlawful for an employer to force an employee to work a full shift of 9 hours, for example, and then have them be on “standby” for the next 12 hours – to do so would violate the condition regarding the daily rest period.


  • The South African Labour Guide, http://www.labourguide.co.za/conditions-of-employment/763-working-hours-and-overtime

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)


Historically restraint of trade agreements were void and unenforceable unless the employer could prove that it was a reasonable agreement entered into between the parties. Fortunately for employers the position in our law has changed.

What are restraint of trade agreements?

 An agreement that seeks to restrict a party’s right to carry on a trade, business or profession in such manner or with such persons as he/she sees fit, is restraint of trade.

Restraint of trade clauses are most commonly found in employment and partnership contracts, which usually takes effect after termination of the contract, or in sale of a business or practice.

Why are they controversial?

They are controversial because there is a clash of fundamental values: on the one hand there is freedom or sanctity of contract which relies on agreements being honoured, and on the other hand there is freedom of trade which is a constitutionally recognised right.

As with other contracts, restraint of trade agreements are presumed to be prima facie valid and enforceable. Whereas the onus had earlier been on the employer to prove that implementation of restraint of trade was fair and in public interest, the onus is now on the employee to show why enforcement in the particular circumstances would be against the public interest.

An unreasonable restraint is contrary to the public interest and hence unenforceable. The reasonableness of a restraint of trade clause or agreement is judged on two bases: broad interests of community, and interests of the parties themselves.

Reasonableness inter partes depends on a variety of factors:

  • Does the employer have a protectable interest?
  • Area and duration of restraint (possibility of partial enforcement)
  • Concession by the employee in the contract that restraint is reasonable, and inequality of bargaining power of parties (these factors carry little weight)

Examples of protectable interests are confidential information, trade secrets, customer connections and lists, and goodwill of the business. However, it does not include interest in the elimination of competition, and the investment of time and capital in the training of the employee.

It is not sufficient simply to label confidential information as such. In order to be confidential the information must be commercially useful, in other words capable of application in trade or industry, have economic value to the person seeking to protect it, and be known only to a restricted number of people.

With regards to trade connections, it will only be relevant when the employee has close working relations with the customers, to such an extent that there is a danger of him/her taking them with him/her when he/she leaves the business. Relevant factors here include the following:

  • duties of the employee;
  • his/her personality;
  • frequency and duration of the contact with the customers;
  • his/her influence over them;
  • nature of his/her relationship with them (degree of attachment, extent of their reliance on him/her);
  • level of competition between the rival businesses;
  • type of product sold; and
  • evidence that customers were lost when he/she left the business.

With reference to the above the following questions must be asked:

  1. Does party A have an interest deserving of protection?
  2. Is such interest being prejudiced by party B?
  3. If so, how does A’s interest weigh up qualitatively and quantitatively against B’s interest in not being economically inactive and unproductive?
  4. Is there some broader facet of public policy that requires the enforcement or rejection of the restraint?

If restraint of trade agreement is reasonable inter partes, it may still be unenforceable if it is damaging to the public interest for a reason not peculiar to the parties.


Basson v Chilwan & Others [1993] 3 SA 742

Sunshine Records (Pty) Ltd v Flohing & Others 1990 (4) SA 782 (A)

Magna Alloys & Research (SA) (Pty) Ltd v Ellis 1984 (4) SA 874 (A)

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)


We have all made New Year’s Resolutions. This year I will start exercising, eating healthy and spend less time at the office and more with the family. In order to fulfill this resolution, you join the local gymnasium as soon as you return from your December holiday. It does not bother you whether the agreement is for two, three or four years. This year you are going to keep that resolution!

Then winter arrives and you spend more time at the office and at the fireside and less time in the gymnasium. By August you recognise the debit order of the gymnasium on your bank statement, knowing full well that you have not been there for at least two months.

The Consumer Protection Act (“the act”) has limited the effect of fixed-term agreements containing automatic renewal clauses for a further fixed term. As the legislator has given a wide definition to the words “goods” and “services”, most fixed-term agreements will fall within the scope of the act. Section 16 of the act provides that any consumer may cancel a long-term agreement with twenty business days’ notice, which notice must be in writing, unless both parties to the agreement are juristic persons.

The act then provides that the supplier may be entitled to a “reasonable cancellation penalty” payable by the consumer for cancelling the fixed-term agreement. What constitutes a reasonable cancellation penalty will depend on the type and nature of the contract.

Lester Timothy of Deneys Reitz Attorneys uses the example of a mobile phone contract, an analogy most of us will understand. A consumer enters into a two-year contract with a mobile phone service provider and simultaneously purchases a handset to be paid by monthly installments in the course of the two-year contract. The service provider will thus have incurred expenses regarding the handset. Therefore, in the event of the consumer cancelling the contract, it will be acceptable for the mobile service provider to charge the consumer for the outstanding balance of the handset to recover the expenses incurred.

Where a supplier incurs no significant additional cost as a result of the cancellation of the contract, the supplier will have more difficulty to establish the reasonableness of any cancellation penalty unless a discount is given.

You may therefore approach that gymnasium and notify them in writing of your intention to cancel the agreement after twenty business days. Depending on the remaining period of your contract and the wording of the agreement, you will have to pay a reasonable cancellation penalty. However, as the gymnasium did not incur significant additional costs as a result of your cancellation, you will be entitled to a discount on the remaining balance of the agreement.

Negotiate the cancellation penalty fee with the gymnasium. You may be surprised what the offer of an immediate payment as cancellation penalty can do.

And next year, rather buy running shoes, even expensive ones. They will wait patiently in your wardrobe till the following New Year’s Day…

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted. (E&OE)


Hierdie artikel handel oor die vraagstuk of kontrakte wat deur minderjariges, met hul ouers se kredietkaarte, aangegaan is bindend is met spesifieke verwysing na sosiale mediaplatforms, soos Facebook.

Beide die gemenereg en wetgewing maak voorsiening vir bepalings rakende minderjariges se reg om verskillende tipes kontrakte aan te gaan. Volgens die Kinderwet, 38 van 2005 is ‘n minderjarige, ‘n persoon tussen die ouderdom van 7 en agtien jaar. Volgens die gemenereg het ‘n minderjarige nie die reg om bindende verpligtinge aan te gaan ingevolge ‘n kontrak nie, en moet die hulp of toestemming van die betrokke minderjarige se voog verkry word, alvorens ʼn kontrak aangegaan kan word. Die toestemming kan gegee word voordat die kontrak gesluit word of daarna, in welke geval dit gesien word as bekragtiging van die kontrak. Daar kom uitsonderings op hierdie reël voor, wat gevind kan word in verskeie stukke wetgewing, sowel as in die gemene reg, soos kontrakte waar die minderjarige net regte en geen verpligtinge verkry (bv. ‘n donasie).

‘n Minderjarige kan aanspreeklikheid vermy, selfs wanneer hulle gebind is in terme van die kontrak (d.w.s. waar die ouer die minderjarige bygestaan het ​​in die sluiting van die kontrak, daartoe toegestem het of die kontrak daarna bekragtig het). Dit kan gedoen word in die geval waar die kontrak nadelig is vir die minderjarige ten die tyde van die kontraksluiting. Die hof kan dan op aansoek, die kontrak tersydestel en las dat alle betrokke party in dieselfde posisie geplaas word, as wat hulle was voor die kontrak gesluit is.

Facebook is tans betrokke by ‘n deurlopende klasaksie regsgeding waar ouers in Amerika eis dat Facebook die wyse waarop aanlyn transaksies deur minderjariges hanteer word verander.

Prokureurs stel dat dit belangrik is dat Facebook kennis dra van ‘n gebruiker se werklike ouderdom, maar kinders word nog steeds dieselfde as volwasse gebruikers behandel wanneer geld (die sluiting van kontrakte) betrokke is.

Een van die grootste probleme is dat wedersydse prestasie, synde die betaling van geld via kredietkaart of debietkaart en die kind krediete verwerf, byna onmiddellik plaasvind. Daarom, as die ouer terugbetaal word, sou die minderjarige onregverdig verryk word deur die gebruik van die krediete.

Die stelsel wat Facebook tans gebruik is problematies aangesien dit minderjariges misbruik wat nie die kontrakte wat hulle aangaan, wanneer hulle krediete koop om aanlyn speletjies te speel, ten volle verstaan nie​​. Verder skep die huidige stelsel die moontlikheid van situasies waar ouers, wat onmiddellik terugbetaal moet word, toestem tot die aankope en dan nadat die kind die krediete verkry en gebruik het, versoek dat hul rekeninge gekrediteer word as gevolg van ‘n ‘gebrek aan toestemming’.

Dit is duidelik dat hierdie betrokke stelsel van betaling verander moet word en dat daar duidelikheid verkry moet word oor hoe om hierdie betrokke situasie in Suid-Afrika te hanteer, nadat ’n uitspraak rakende die klasaksie in Amerika gelewer is. Op die oomblik, blyk dit dat daar geen oplossing is, vir ouers wie se kinders te veel geld bestee, of hul krediet of debiet kaarte sonder hul toestemming gebruik nie. Indien jou kind van Facebook speletjies hou is dit dalk ‘n goeie idee om ‘n ogie te hou oor jou beursie totdat daar duidelikheid is oor die verhaalregte beskikbaar vir ouers wat hulself in hierdie situasie bevind.

Verwysings Lys

Hierdie is ‘n algemene inligtingstuk en moet gevolglik nie as regs- of ander professionele advies benut word nie. Geen aanspreeklikheid kan aanvaar word vir enige foute of weglatings of enige skade of verlies wat volg uit die gebruik van enige inligting hierin vervat nie. Kontak altyd u regsadviseur vir spesifieke en toegepaste advies.


Disclaimer notices offer protection for owners and employees concerning shopping centres, stadiums, parking lots and other public areas. For these notices to be effective, certain requirements have to be adhered to. False reliance on these disclaimers can be a very expensive mistake. Find out whether your disclaimer notice will be sufficient to protect you and your employees.

Disclaimer notices are commonly seen in shopping centres, stadiums, parking lots and other public areas. These notices are generally aimed at protecting the owner or employees with regards to the area in question, by exempting him/her from legal liability when a member of public using the area suffers damage.

It is well established that disclaimer notices are enforceable when properly implemented. This is clear from the extract below:

Durban’s Water Wonderland (Pty) Ltd v Botha and Another (1999) 1 All SA 411 (A) at 115:

“If the language of a disclaimer or exemption clause is such that it exempts the proferens from liability in express and unambiguous terms effect must be given to that meaning. If there is ambiguity, the language must be construed against the proferens. (See Government of the Republic of South Africa v Fibre Spinners & Weavers (Pty) Ltd 1978 (2) SA 794 (A) at 804 C.)”

According to prevailing case law, when considering whether a disclaimer notice is effective, two factors have to be considered:

Firstly, from the Durban Water Wonderland case, it is evident that for the disclaimer’s content to be effective, the wording thereof must not be ambiguous. It is therefore required that the disclaimer must indicate in express terms what the person relying on the disclaimer is exempted from when someone reads the disclaimer. However, any alternative meaning of the disclaimer notice cannot be too widely interpreted. It is simply required that the meaning of the disclaimer is clear to anyone reading it. This test is implemented so that a vague statement cannot be regarded as sufficient to bind someone according to the legal principle of so called “quasi-mutual assent”, which is the underlying basis binding a person that reads a disclaimer notice.

Consider the following examples: “the owner of the property is hereby exempted” and “the owner, managing agent and any other employee is hereby exempted”. In the first example only the owner of the property is exempted from liability, while in the second example, employees of the owner and the managing agent of the property are included under the exemption clause. The first example would not have been sufficient if damage was caused to a person by the negligence of an employee, as employees were clearly not within the ambit of the notice. It is therefore important to ensure that the wording of a disclaimer is clear, unambiguous and is sufficient to protect all parties that need protection.

A further issue to take into account when the effectiveness of a disclaimer notice is considered is the question whether such disclaimer has been properly displayed. A disclaimer can only be effective when it is found that the disclaimer was displayed in an appropriate position, which would allow the reasonable person to have seen the disclaimer, or to ought to have seen the disclaimer. Practical issues, such as the size of the disclaimer, the distance from the viewer, the visibility, font and positioning of the disclaimer should be taken into account. This test is implemented as the content of the disclaimer can only fall within the knowledge of a person, when the notice is of such a nature that it is easily spotted by someone. When a disclaimer is affixed to a premise, it is therefore important that the above factors be taken into account.

It is clear that a disclaimer is an effective method of protection, especially when used in areas where large amounts of people visit frequently. However, the use of a disclaimer notice is a potentially risky practise, as it must be ensured that the wording and placement thereof is sufficient for the reliance thereon. It is recommended that an attorney be consulted before putting up such a notice.



Durban’s Water Wonderland (Pty) Ltd v Botha and Another (1999) 1 All SA 411 (A)

Government of the Republic of South Africa v Fibre Spinners & Weavers (Pty) Ltd 1978 (2) SA 794 (A)

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.