THE CONSUMER’S RIGHTS UNDER THE CONSUMER PROTECTION ACT

Can a consumer take you, the service provider, to court because they did not understand some of the terms and conditions of your signed contract? Beware, the answer is Yes!

From April 2011 the Consumer Protection Act came into full effect with the result that it is now against the law to use difficult-to-understand language in any business document or contract.

Business usually comes with some kind of paperwork, whether it’s a contract, a letter of agreement or even an instruction booklet. These vital documents are often written in language that is hard to understand for the average consumer, which is why there are specific Plain Language regulations in The Consumer Protection Act to prevent consumers from signing documents they do not understand.

Protecting the consumer

The Act’s express purpose is to make sure consumers are not treated unfairly – intentionally or not. This means that using plain language is more crucial than ever. From now on, using obscure and confusing wording, especially in binding contracts, is not allowed. Quite simply, it’s illegal!

Too many consumers have landed in big trouble, especially financial trouble, because they haven’t understood what they’ve signed. Sometimes contracts are written in bloated, bureaucratic jargon just because that’s the way it has always been, or because the people writing the contracts don’t know any other way to do it. Often, though, unscrupulous businesses have used complicated language on purpose, as a way to trick consumers into paying for something they can’t afford, to sign away their rights, or to agree to unfair terms and conditions.

Defining plain language

The Consumer Protection Act defines plain language in Part D, Section 22 as follows:

For the purposes of this Act, a notice, document or visual representation is in plain language if it is reasonable to conclude that an ordinary consumer of the class of persons for whom the notice, document or visual representation is intended, with average literacy skills and minimal experience as a consumer of the relevant goods or services, could be expected to understand the content, significance, and import of the document without undue effort, having regard to:

The context, comprehensiveness and consistency of the notice, document or visual representation;

The organisation, form and style of the notice, document or visual representation;

The vocabulary, usage and sentence structure of the notice, document or visual representation; and

The use of any illustrations, examples, headings, or other aids to reading and understanding.

This means that one won’t be permitted to word things so widely that they can be understood in several ways. The Act states that if there is any doubt about the meaning of certain words or terms and conditions, the benefit will go to the consumer. Even advertising and marketing may no longer contain any ambiguity. Advertisements won’t be allowed to exaggerate and they will have to be easy to understand, fair and honest. The Act states that service providers will have to spell out everything in words that consumers can understand. Alternatively the consumers have the right to full disclosure and information in plain and understandable language.

 Therefore, don’t delay. If you have a business document or contract that has been used for generations you might have to take a second look at it to edit or reword it so that it complies with the Consumer Protection Act.

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)

U TESTAMENT – ‘N BELANGRIKE DOKUMENT

Die lewe is baie onvoorspelbaar en ons adviseer graag kliënte om erns te maak om ‘n testament in plek te hê en boedelbeplanning te doen. Hieronder is redes waarom dit een van u belangrikste prioriteite behoort te wees.

V: Hoekom behoort ek ‘n testament te hê?

A: ‘n Testament stel u in staat om erfgename volgens u keuse te benoem. Indien u sonder ‘n testament (intestaat) sou sterf, sal u bates volgens die Wet op Intestate Erfopvolging verdeel word. Dit mag dus die gevolg hê dat persone wie u nie as erfgename sou benoem nie, voordele by u afsterwe ontvang.

V: Wie mag u testament as getuie onderteken?

 A: Die testament moet in die teenwoordigheid van twee getuies geteken word, wat ook in die teenwoordigheid van mekaar teken. Slegs persone 14 jaar en ouer kwalifiseer om as getuies te teken.

V: Wat beloop Eksekuteursvergoeding?

 A: Die maksimum vergoeding waarop ‘n Eksekuteur geregtig is, word deur Wetgewing vasgestel en beloop tans 3.5% van u totale bruto boedelwaarde. Eksekuteursvergoeding behoort egter onderhandel te word met die persoon wat as Eksekuteur van u testament benoem word.

V: Hoe gereeld behoort ek my testament te hersien?

 A: Dit word aanbeveel dat testamente ten minste elke 2 jaar hersien word. Dit is egter ook belangrik om die hersiening van u testament met gebeurtenisse soos bv. ‘n huwelik, ‘n geboorte, ‘n egskeiding of die aankoop van eiendom te oorweeg.

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. (E&OE)

DISPUTES WITH BODY CORPORATE: HOMEOWNERS’ REMEDIES

Our office recently dealt with a matter where the trustees of the body corporate of a certain sectional title scheme clamped the wheel of the car of one of its homeowners because he did not park on his allocated parking bay.

Even though the homeowner did not park on his allocated parking bay, he could not understand why his vehicle got clamped for parking outside of his own front porch, when he was in and out of the house during the day. It seemed highly unfair and unreasonable to the homeowner.

It is a truism that every homeowner cannot do as he pleases as this would lead to total disorder in the sectional title scheme, and it is the duty of the trustees of the body corporate to enforce rules on owners and tenants alike. When one buys a property in a sectional title scheme one will more often than not find a provision in the agreement which states that homeowners, inter alia, will abide by the rules of the body corporate.

This begs the question whether or not the homeowner’s hands are tied if the rules were amended by a special decision taken at a general meeting by the trustees of the body corporate.

Remedies available to homeowners and tenants

If there is reason to believe that the trustees of the body corporate of a sectional title scheme have acted ultra vires (outside their powers), homeowners have a choice of two remedies – either arbitration or an interdict.

  1. Arbitration step-by-step

The discontented homeowner could apply for arbitration, the duration of which should not exceed a maximum of 52 days.

In terms of Section 71 of Annexure 8 of the Sectional Title Act 95 of 1986, the purpose of arbitration is not, as some believe, to achieve compliance. The prescribed process requires the discontented homeowner to submit his dispute in writing to the trustees of the body corporate of the sectional title scheme within 14 days of the problem arising, whereafter the trustees will review and attempt to settle the matter. Should the problem still not be resolved, either the homeowner or the trustees of the body corporate can request that the matter be referred for arbitration.

The arbitrator has wide discretion in making a costs award. He may order payment by one party, by more than one jointly, or in specific proportions, depending on the outcome of the arbitration. The arbitrator’s decision may be made an order of the High Court upon application by either party, or a party affected by the arbitration.

  1. Alternative remedy

There is a further remedy available to the homeowner, namely an interdict or any form of urgent or other relief by a court with jurisdiction.

But this line of action has elicited the following warning:

Furthermore, the interdependence of the owners and occupants of units and the unavoidable requisite of harmonious co-existence render an interdict inadequate and indeed improper in the sectional title context. A successful application for an interdict can permanently ruin the harmony of a scheme (LAWSA aw para 238).

In essence, if the rules of your body corporate allow the trustees to clamp your wheel should you disobey the rules, and you have reason to believe that your Body Corporate is acting outside of its powers and/or the rules are unreasonable, you may follow the steps as set out above.

REFERENCED WORK:

  • See the article “Managing the Unmanageable” by Tertius Maree, published in De Rebus, August 1999.
  • Also see the article “Arbitration in Sectional Title Disputes” by Tertius Maree, published in De Rebus, August 1998.

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)

CANCELLATION OF THAT GYMNASIUM CONTRACT

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)