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Impact of CPA - 2

11 November 2010

See Impact of CPA 1 for the introduction and first part of this article.

Section 49 Notice required for certain terms and conditions
(1) Any notice to consumers or provision of a consumer agreement [note that only an agreement between a supplier and a consumer is a 'consumer agreement'] that purports to-
(a) limit in any way the risk or liability of the supplier or any other person;
(b) constitute an assumption of risk or liability by the consumer;
(c) impose an obligation on the consumer to indemnify the supplier or any other person for any cause; or
(d) be an acknowledgement of any fact by the consumer,
must be drawn to the attention of the consumer in a manner and form that satisfies the formal requirements of subsections (3) to (5).

(2) In addition to subsection (1), if a provision or notice concerns any activity or facility that is subject to any risk-
(a) 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,
the supplier must specifically draw the fact, nature and potential effect of that risk to the attention of the consumer in a manner and form that satisfies the requirements of subsections (3) to (5), and the consumer must have assented to that provision or notice by signing or initialling the provision or otherwise acting in a manner consistent with acknowledgement of the notice, awareness of the risk and acceptance of the provision.

(3) A provision, condition or notice contemplated in subsection (1) or (2) must be written in plain language, as described in section 22.

(4) The fact, nature and effect of the provision or notice contemplated in subsection (1) must be drawn to the attention of the consumer-
(a) in a conspicuous manner and form that is likely to attract the attention of an ordinarily alert consumer, having regard to the circumstances; and
(b) before the earlier of the time at which the consumer-
(i) enters into the transaction or agreement, begins to engage in the activity, or enters or gains access to the facility; or
(ii) is required or expected to offer consideration for the transaction or agreement.

(5) The consumer must be given an adequate opportunity in the circumstances to receive and comprehend the provision or notice as contemplated in subsection (1).

Section 51 Prohibited transactions, agreements, terms or conditions
(1) A supplier must not make a transaction or agreement subject to any term or condition if-

(a) its general purpose or effect is to-
(i) defeat the purposes and policy of this Act;
(ii) mislead or deceive the consumer; or
(iii) subject the consumer to fraudulent conduct;
(b) it directly or indirectly purports to-
(i) waive or deprive a consumer of a right in terms of this Act;
(ii) avoid a supplier's obligation or duty in terms of this Act;
(iii) set aside or override the effect of any provision of this Act; or
(iv) authorise the supplier to-
(aa) do anything that is unlawful in terms of this Act; or
(bb) fail to do anything that is required in terms of this Act;
(c) it purports to-
(i) limit or exempt a supplier of goods or services from liability for any loss directly or indirectly attributable to the gross negligence of the supplier or any person acting for or controlled by the supplier;
(ii) constitute an assumption of risk or liability by the consumer for a loss contemplated in subparagraph (i); or
(iii) impose an obligation on a consumer to pay for damage to, or otherwise assume the risk of handling, any goods displayed by the supplier, except to the extent contemplated in section 18 (1);
(d) it results from an offer prohibited in terms of section 31;
(e) it requires the consumer to enter into a supplementary agreement, or sign a document, prohibited by subsection (2) (a);
(g) it falsely expresses an acknowledgement by the consumer that-
(i) before the agreement was made, no representations or warranties were made in connection with the agreement by the supplier or a person on behalf of the supplier; or
(ii) the consumer has received goods or services, or a document that is required by this Act to be delivered to the consumer;
(h) it requires the consumer to forfeit any money to the supplier-
(i) if the consumer exercises any right in terms of this Act; or
(ii) to which the supplier is not entitled in terms of this Act or any other law;
(i) it expresses, on behalf of the consumer-
(iii) a consent to a predetermined value of costs relating to enforcement of the agreement, except to the extent that is consistent with this Act; or

(3) A purported transaction or agreement, provision, term or condition of a transaction or agreement, or notice to which a transaction or agreement is purported to be subject, is void to the extent that it contravenes this section.

(4) This section does not preclude a supplier to require a personal identification code or number in order to facilitate a transaction that in the normal course of business necessitates the provision of such code or number.

Section 55 Consumer's rights to safe, good quality goods
(1) This section does not apply to goods bought at an auction, as contemplated in section 45.

(2) Except to the extent contemplated in subsection (6), every consumer has a right to receive goods that-
(a) are reasonably suitable for the purposes for which they are generally intended;
(b) are of good quality, in good working order and free of any defects;
(c) will be useable and durable for a reasonable period of time, having regard to the use to which they would normally be put and to all the surrounding circumstances of their supply; and
(d) comply with any applicable standards set under the Standards Act, 1993 (Act 29 of 1993), or any other public regulation.

(3) In addition to the right set out in subsection (2) (a), if a consumer has specifically informed the supplier of the particular purpose for which the consumer wishes to acquire any goods, or the use to which the consumer intends to apply those goods, and the supplier-
(a) ordinarily offers to supply such goods; or
(b) acts in a manner consistent with being knowledgeable about the use of those goods,
the consumer has a right to expect that the goods are reasonably suitable for the specific purpose that the consumer has indicated.

(4) In determining whether any particular goods satisfied the requirements of subsection (2) or (3), all of the circumstances of the supply of those goods must be considered, including but not limited to-
(a) the manner in which, and the purposes for which, the goods were marketed, packaged and displayed, the use of any trade description or mark, any instructions for, or warnings with respect to the use of the goods;
(b) the range of things that might reasonably be anticipated to be done with or in relation to the goods; and
(c) the time when the goods were produced and supplied.

(5) For greater certainty in applying subsection (4)-
(a) it is irrelevant whether a product failure or defect was latent or patent, or whether it could have been detected by a consumer before taking delivery of the goods; and
(b) a product failure or defect may not be inferred in respect of particular goods solely on the grounds that better goods have subsequently become available from the same or any other producer or supplier.

(6) Subsection (2) (a) and (b) do not apply to a transaction if the consumer-
(a) has been expressly informed that particular goods were offered in a specific condition; and
(b) has expressly agreed to accept the goods in that condition, or knowingly acted in a manner consistent with accepting the goods in that condition.

Section 56 Implied warranty of quality
(1) In any transaction or agreement pertaining to the supply of goods to a consumer there is an implied provision that the producer or importer, the distributor and the retailer each warrant [this section does therefore not apply to all suppliers but only to a 'producer', a 'distributor' and a 'retailer' as defined (it is obviously impossible to import immovable property] that the goods comply with the requirements and standards contemplated in section 55, except to the extent that those goods have been altered contrary to the instructions, or after leaving the control, of the producer or importer, a distributor or the retailer, as the case may be.

(2) Within six months after the delivery [in other words the date of registration of transfer into the name of the purchaser who is a consumer] of any goods to a consumer, the consumer may return the goods to the supplier, without penalty and at the supplier's risk and expense [both transfer costs and transfer duty would probably be payable], if the goods fail to satisfy the requirements and standards contemplated in section 55, and the supplier must, at the direction of the consumer, either-
(a) repair or replace the failed, unsafe or defective goods; or
(b) refund to the consumer the price paid by the consumer, for the goods.

(3) If a supplier repairs any particular goods or any component of any such goods, and within three months after that repair, the failure, defect or unsafe feature has not been remedied, or a further failure, defect or unsafe feature is discovered, the supplier must-
(a) replace the goods; or
(b) refund to the consumer the price paid by the consumer for the goods.

(4) The implied warranty imposed by subsection (1), and the right to return goods set out in subsection (2), are each in addition to-
(a) any other implied warranty or condition imposed by the common law, this Act or any other public regulation; and
(b) any express warranty or condition stipulated by the producer or importer, distributor or retailer, as the case may be.

SUGGESTED CLAUSE IF SELLER IS A SUPPLIER AS DEFINED.
1.1 In this clause 3, unless the context indicates a contrary intention, the following words and expressions shall bear the meanings assigned to them hereunder and cognate words and expressions shall bear corresponding meanings:
1.1.1 "the Buildings" - the building or buildings and any other improvements erected or to be erected on the Land by the Seller;

1.1.2 "the CPA" - the Consumer Protection Act 68 of 2008;

1.1.3 "the Land" - certain Erf # situated in the town .........;

1.1.4 "the NHBRC Act" - the Purchasers Protection Measures Act 95 of 1998 (as amended);

1.1.5 "The Property" - a joint reference to the Land and the Buildings;

1.2 It is recorded that the Seller is a 'producer' as defined in the CPA" and that the Property is sold with an 'implied warranty of quality' as provided for in section 56 of the CPA being a warranty that the Property complies with the requirements and standards contemplated in section 55 of the CPA which section 55 provides that the Purchaser has a right to receive the Property on the basis that-
(a) it will be reasonably suitable for the purposes for which it is generally intended;
(b) it is of good quality, in good working order and free of any defects;
(c) it will be useable and durable for a reasonable period of time, having regard to the use to which the Property would normally be put and to all the surrounding circumstances of its supply
except to the extent that that the Buildings have been altered after having left the control of the Seller.

1.3 It is however (as provided for in section 55(6) of the CPA) recorded that:
(a) the Purchaser has been expressly informed that the Property is offered to the Purchaser in the condition as it stands with certain patent (visible) defects and possible latent (invisible) defects and;
(b) that the Seller has allowed the Purchaser a reasonable opportunity to examine the Property, that the Purchaser has carefully inspected the Property and hereby expressly agrees to accept the Property in the condition that it stands or, if the Buildings still needs to be erected in terms of the provisions of this Agreement, the Purchaser agrees to accept the Property as it stands provided the Buildings are erected in a workmanlike fashion and in substantially in terms of the attached plans and specifications.
(Purchaser to initial next to this provision as proof that the Purchaser has assented to this provision and the Purchaser acknowledges the notice and his awareness of the risk and acceptance of the provision) In the event of a dispute as to whether the Buildings shall have been erected in a workmanlike fashion and in substantially in terms of the attached plans and specifications the matter shall be referred to an independent architect agreed upon by the Parties (or, if they cannot within 3 days agree, by the President of the Institute of Architects for the Free State Province) which architect, acting as expert and not as arbitrator, shall determine whether the Buildings have been erected in a workmanlike fashion and substantially in terms of the attached plans and specifications and, if he determines that same is not the case, the Seller shall do everything required by that architect until the architect is satisfied that the Buildings shall have been erected in a workmanlike fashion and in substantially in terms of the attached plans and specifications. If the said architect, after his first inspection, determines that the Buildings have been erected in a workmanlike fashion and substantially in terms of the attached plans and specifications the Purchaser shall pay his costs otherwise his costs shall be paid by the Seller.

1.4 In terms of the provisions of section 13(2) of the NHBRC Act the Seller gives the following warranties enforceable by the Purchaser against the Seller in any court namely that-
(a) the Buildings constructed or is to be constructed in terms of this Agreement-
(i) is or shall (if they still need to be erected in terms of this Agreement) be constructed in a workmanlike manner;
(ii) is or shall be fit for habitation; and
(iii) is or shall be constructed in accordance with-
(aa) the NHBRC Technical Requirements to the extent applicable to the Buildings at the date of enrolment of the Buildings with the Council; and
(bb) the plans and specifications hereunto annexed (if any);
(b) the Seller shall-
(i) subject to the limitations and exclusions that may be prescribed by the Minister, at the cost of the Seller and upon demand by the Purchaser, rectify major structural defects in the Buildings caused by the non-compliance with the NHBRC Technical Requirements and occurring within a period of five years as from the Occupation Date, and notified to the Seller by the Purchaser within that period;
(ii) rectify non-compliance with or deviation from the terms, plans and specifications of the agreement or any deficiency related to design, workmanship or material notified to the Seller by the Purchaser within a period of three months as from the Occupation Date; and
(iii) repair roof leaks attributable to workmanship, design or materials occurring and notified to the Seller by the Purchaser within 12 months as from the Occupation Date.

Roelie Rossouw

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