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ESSENTIAL ASPECTS FOR BUSINESS OF THE CONSUMER PROTECTION ACT - page 2 / 4

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6. FRAMEWORK OF THE CPA: DEFINITIONS

Note: Ensure that you are familiar with the follow essential denitions from the Act.

GOODS:

Anything for human consumption, any tangible object, any literature, music, photograph, game, information, data, software, other tangible product written on any medium, a legal interest in land, gas, water and electricity.

SERVICES:

Any work or undertaking, provision of education or information, advice or consultation, any banking services or nancial services, transportation of individual or goods, provision of accommodation, entertainment or access to entertainment, access to any electronic communication infrastructure, access to any event, premises, activity or facility, access to premises in terms of rental and right of occupation.

TRANSACTION:

An agreement for the supply (or potential supply) of any goods of services in the suppliers ordinary course of business.

Note: the Act is only applicable to transactions between a supplier and a consumer in the ordinary course of the supplier’s business.

CONSUMER:

  • A person (including small companies) to whom goods or services are marketed or who has entered into a transaction with a supplier in the suppliers ordinary course of business

  • A user of the goods or recipient or beneciary of the services irrespective of whether the user is a party to the transaction

  • A franchisee

Note: Government and large businesses are not Consumers. The Regulations for the Act (which are still to be promulgated) will provide the threshold for the annual turn-over (and asset base) for companies, above which, companies will deemed not to be consumers.

7. SUMMARY OF ESSENTIAL DEFINITIONS THE KEY TO THE CPA Goods and Services

Promoted or transacted in the ordinary course of the supplier’s business

To the Consumer

  • 8.

    VOETSTOOTS CLAUSE

    • A sells his (only) primary residence to B: voetstoots is still applicable

    • A sells his (only) beach house to B: voetstoots is still applicable

    • A sells his primary residence to B: but the seller used the services of a real estate agent who was the effective cause of the deal: The Act is applicable to the mandate that the estate agent takes from the seller. The Act is accordingly applicable to all of the services provided by the agent to the parties. While it is currently a huge point of discussion and controversy, the agent’s involvement should not elevate the agreement between the seller and the purchaser (which is not an ordinary course transaction) to a transaction to which the Act is applicable. The voetstoots clause should therefore still be allowed in these agreements.

    • A sells one of his units in his developments to B: the Act is applicable to these transactions because this is an ordinary course transaction. The supply chain is also jointly and severally liable for the product (the unit). The agent would be included in the supply chain.

Note: the voetstoots clause (a product of common law) will still be in use and applicable to transactions which are not ordinary course transactions.

9. IMPORTANT PROVISIONS Section14: Expiry and renewal of xed-term agreements

A consumer may terminate a long-term contract on 20 business days notice. (Section 14 is however not applicable to companies or CCs regardless of turn-over). The supplier in only entitled to a reasonable cancellation fee in such an event. In the current draft Regulations the cancellation fee is currently set as a maximum of 10% of the value of the remainder of the contract.

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