CONSUMER PROTECTION ACT - Cliffe Dekker Hofmeyr
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COMPETITION CONSUMER PROTECTION ACT
OVERVIEW AGREEMENTS
WITH CONSUMERS
defects in those goods. As a result
of the fact that liability is strict
(a “no-fault” principle), retailers
The coming into force of the The CPA extensively regulates the and distributors may also face
Consumer Protection Act, No 68 content of consumer agreements claims from consumers who have
of 2008 (CPA), in April 2011 not (those agreements entered into suffered loss and damage due to
with consumers directly) in both defective goods.
only dramatically changed the form and substance. As a result, it
legal landscape for the conduct also impacts on how businesses,
The CPA also provides for limited
duration implied warranties of
of business with consumers, but and their representatives, conduct
quality on all goods supplied to
also in respect of marketing to themselves when they enter into
consumers. These warranties are
and, ultimately, seek to enforce
consumers and for businesses consumer agreements. Every
read into existing agreements,
involved in manufacturing override contrary contractual
form of agreement, from detailed
provisions and form part of all
consumer goods, even if those terms of supply to disclaimer signs,
transactions underlying the
are affected.
businesses don’t deal with purchase of goods by consumers.
end consumers. The NCC took an early interest Save for limited exceptions, their
in the consumer agreements of operation cannot be excluded
The National Consumer various industries. In many cases in agreements.
Commission (NCC) has made it this has extended to considering
The CPA also provides for
related conduct and practices in
clear that it will vigorously pursue those industries as well.
minimum service standards
its mandate to protect consumers and consumer remedies for
Terms and conditions, warranties, consumers dissatisfied with
and bring to book businesses that indemnities and disclaimers fall services purchased.
don’t comply with the CPA. A into this category – irrespective
good knowledge of the CPA and of the manner in which they are MARKETING AND
how to comply with its content communicated to consumers.
FAIR AND HONEST
In particular, the CPA places
are mandatory for consumer great emphasis on the fact that
DEALING
driven businesses. information made available The activities which are sought to
to consumers must be plain be regulated can be divided into
The CPA regulates supplier and and understandable, taking two groups:
consumer relationships under into account the context
Firstly, those that relate to the
three broad category headings. of the relationship with the
manner in which consumers
consumer. Certain terms must
be conspicuous in order to are dealt with when marketing
be enforceable. products to them. The focus is on
the substance of interactions with
consumers and not their form. The
IMPLIED WARRANTIES CPA explicitly prohibits false or
AND STRICT misleading practices. Also included
PRODUCT LIABILITY are extensive provisions regulating
practices commonly accepted
Retailers face increased product
as posing risks to consumers if
liability risks, but the CPA may also
left unchecked. These practices
create significant legal risks for
include referral selling, alternative
businesses that do not actually
work schemes, pyramid schemes,
supply goods or services directly
bait marketing and negative
to consumers.
option marketing.
The CPA imports the concept of
Secondly, the CPA regulates
strict liability for defective goods
specific marketing practices
into South African law. Even where
commonly undertaken by firms.
a business does not deal with
These practices include auctions,
consumers directly, but goods
customer loyalty programs,
which it supplies end up in the
promotional competitions, direct
hands of consumers (even outside
marketing and trade coupons,
the scope of a transaction), every
and related promotions.
business in the supply chain, from
manufacturer to retailer may be
at risk of incurring liability for
CONSUMER PROTECTION ACT | cliffedekkerhofmeyr.com
BE INTROSPECTIVE, BE
PROACTIVE, BE PREPARED
CPA compliance should not be
reactive, as reactions may be too
late to avoid regulator scrutiny,
sanctions and reputational
harm. CPA compliance should
be constant, proactive and
continuously assessed.
Compliance begins with CPA
familiarity and education.
Assert your rights in the event
that the regulator does approach
you. When the NCC carries out
its mandate it is required to do so
rationally, fairly and within the four
corners of the CPA. You should be
aware of your rights when dealing
with the NCC.
WHAT CAN WE DO FOR
YOUR BUSINESS?
• Training sessions and executive
presentations tailored to
your business
• Opinions regarding the
existence of legal risks and
the application of the CPA
• Focused reviews of internal
processes and documentation.
• Strategic assistance in
dealing with complaints
from consumers
• Interacting with the regulator
on complaint proceedings or
other regulatory action
• Specialised litigation before the
Consumer Tribunal and courts
MARKET RECOGNITION
Our Competition team is externally praised for its depth of resources, capabilities and experience.
Chambers Global 2011–2021 ranked our Competition practice in Band 2 for competition/antitrust. The Legal 500 EMEA 2011–2021
recommended us in Tier 2 for competition. IFLR1000 2009–2018 ranked our practice in Tier 2 for competition.
The way we support and interact with our clients attracts significant external recognition.
Chris Charter is the Practice Head of the Competition team. Chambers Global 2018–2021 ranked him in Band 1 for
competition/antitrust. Chambers Global 2015–2017 ranked him in Band 2 for competition/antitrust. The Legal 500 EMEA 2017–2021
recommended Chris as a leading individual for competition. The Legal 500 EMEA 2012–2016 recommended him for competition.
IFLR1000 2019–2021 recommended him as a highly regarded lawyer for competition/antitrust. IFLR1000 2011–2018 recommended
Chris as a leading lawyer for competition. Global Competition Review 2020–2021 named Chris a highly recommended lawyer.
Chambers Global 2020–2021 ranked Albert Aukema as an up and coming competition lawyer. The Legal 500 EMEA 2021
recommended him for competition.
The Legal 500 EMEA 2020–2021 recommended Justine Krige as a Next Generation Lawyer for corporate, commercial/M&A.
2020
Cliffe Dekker Hofmeyr
2020
2020
1st by M&A Deal Flow.
1st by BEE Deal Flow. 2021
2020 1st by BEE Deal Value.
2020 2nd by General Corporate
Finance Deal Flow.
TIER 2 2020 2nd by General Corporate
COMPETITION Finance Deal Value.
TOP TIER FIRM
BAND 2 2020 3rd by M&A Deal Value.
2020 Catalyst Private Equity Deal
Competition/Antitrust FINANCIAL
2011-2021 of the Year.
AND CORPORATE
CONSUMER PROTECTION ACT | cliffedekkerhofmeyr.com
OUR TEAM
For more information about our Consumer Protection Act sector and services in South Africa and Kenya, please contact:
Chris Charter Albert Aukema Anita Moolman
National Practice Head Director Director
Director T +27 (0)11 562 1205 T +27 (0)21 405 6122
T +27 (0)11 562 1053 E albert.aukema@cdhlegal.com E anita.moolman@cdhlegal.com
E chris.charter@cdhlegal.com
Justine Krige
Director
T +27 (0)21 481 6379
E justine.krige@cdhlegal.com
BBBEE STATUS: LEVEL ONE CONTRIBUTOR
Our BBBEE verification is one of several components of our transformation strategy and we continue to seek ways of improving it in a meaningful manner.
PLEASE NOTE
This information is published for general information purposes and is not intended to constitute legal advice. Specialist legal advice should always be sought
in relation to any particular situation. Cliffe Dekker Hofmeyr will accept no responsibility for any actions taken or not taken on the basis of this publication.
JOHANNESBURG
1 Protea Place, Sandton, Johannesburg, 2196. Private Bag X40, Benmore, 2010, South Africa. Dx 154 Randburg and Dx 42 Johannesburg.
T +27 (0)11 562 1000 F +27 (0)11 562 1111 E jhb@cdhlegal.com
CAPE TOWN
11 Buitengracht Street, Cape Town, 8001. PO Box 695, Cape Town, 8000, South Africa. Dx 5 Cape Town.
T +27 (0)21 481 6300 F +27 (0)21 481 6388 E ctn@cdhlegal.com
NAIROBI
CVS Plaza, Lenana Road, Nairobi, Kenya. PO Box 22602-00505, Nairobi, Kenya.
T +254 731 086 649 | +254 204 409 918 | +254 710 560 114 E cdhkenya@cdhlegal.com
STELLENBOSCH
14 Louw Street, Stellenbosch Central, Stellenbosch, 7600.
T +27 (0)21 481 6400 E cdhstellenbosch@cdhlegal.com
©2021 0704/JULY
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