Consumer Protection Assist

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The Consumer Protection Act and buying defective products: you have the rights!

When you’ve bought a defective product, it is comforting to know that in terms of the Consumer Protection Act (CPA) you as the consumer are not without remedy. But to investigate your options, you must understand what the CPA provides for.

Take the following scenario as example. Andy recently bought an electrical appliance from a retail store. The floor salesperson told him that the product would be compatible with his new iPhone. Excited, Andy rushed home - only to find that the appliance was not compatible with his iPhone. Reluctant to make a scene and still able to partially use the appliance, Andy continued using the item, only to find a few days later that the appliance had completely ‘died’ and would no longer switch back on. Infuriated at both the salesperson that had convinced him to buy the product and the retailer for selling a product that broke so quickly, Andy rushes back to the store to the return the product.

At the store, Andy is directed to the exchange counter. After explaining the situation to the assistant, Andy is shown the exchange notice board stating that the store’s return policy is that defective products must be returned within fourteen days of date of purchase for an exchange or refund and since his till slip shows the item having been bought fifteen days ago, the store cannot refund him his purchase price or replace the item and that he should rather directly contact the producer to find out about a refund or replacement. Additionally, the assistant informs Andy that it was his responsibility to verify the compatibility of the product with his iPhone beforehand, and that the store also cannot be liable for the lack of compatibility.

Many consumers find themselves in situations like that of Andy. So now the question is what the CPA provides for when it comes to defective products and the appropriateness of the product for the use for which it was bought.

The CPA determines that a ‘defect’ can be “any material imperfection in the manufacture of the goods or components, that renders the goods less acceptable than persons generally would be reasonably entitled to expect in the circumstances, or any characteristic of the goods or components that renders the goods or components less useful, practicable or safe than persons generally would be reasonably entitled to expect in the circumstances.”

The CPA further states that every consumer has the right to receive goods that:

In determining whether goods have satisfied the requirements of safe, good quality goods, one has to consider all of the circumstances relating to the supply of those goods, which include the following:

Accordingly, it is irrelevant whether a product failure or defect was latent (hidden) or patent (visible), or whether it could have been detected by a consumer before taking delivery of the item.

Regarding the claim of the assistant that the iPhone compatibility issue was not the store’s problem, the CPA provides answers by providing that if a consumer has specifically informed the store of the particular purpose for which he wishes to acquire the goods and the store (through its sale staff) acts in a manner consistent with knowing about the use of those goods, the consumer has a right to expect that the goods are reasonably suitable for the specific purpose that he has indicated to the sales staff. As the store salesperson assured Andy that he was knowledgeable and that the product was compatible with his iPhone, the store can be held responsible for compatibility issues related to the product.

Lastly, the question remains whether the exchange counter disclaimer prohibiting exchanges or refunds after fourteen days would protect the store against refunding or exchanging Andy’s defective product.

Here the CPA again comes to the rescue by determining that in any transaction for the supply of goods (such as Andy’s sale transaction) there is an implied warranty that the goods will meet the standards as set out above, provided the consumer has not altered or tampered with or used the goods contrary to the instructions. Where goods do not meet these standards, the consumer may return the goods to the store, without any penalty, within six months of delivery of the goods, and the store must repair or replace the defective goods, or refund the consumer for the full price paid for the goods.

The store will thus not be able to use their fourteen day period to avoid responsibility to exchange or refund Andy for the product purchased and Andy can request his money back or exchange the product for a working item.

How good to know that the CPA protects the consumer against the overzealous salesperson promising the world and the store trying to pass the responsibility for defective products back to the consumer.

About the “POPI” Act

The Protection of Personal Information Act 4 of 2013 (“POPI”), which has been signed into law, but has not yet come fully into effect, protects our rights to privacy by setting conditions and requirements for the processing of ‘personal information’, which is any information relating to a living natural person or an identifiable legal entity and includes, amongst others, information such as names, birth dates, identity/registration numbers, passport numbers, demographic information, occupational information, health information, contact information etc. POPI also relates to the ‘processing’ of such information, which includes, amongst others, the collection, use, storage, deletion or destruction of personal information, etc.

POPI establishes a number of role players with specific rights and responsibilities under POPI. The subject of the protection afforded by POPI is the ‘data subject’ which is a person (natural person or legal entity) to whom the personal information relates. This can be a new or existing client, a prospective client, a supplier, or any other person whose personal information is being processed by your organisation. Data subjects can also be resident anywhere in the world and will qualify as a data subject if their personal information is processed by a responsible party in South Africa. 

On the other side of the coin is the ‘responsible party’ who is the party who must comply with POPI. The responsible party is the party that processes the personal information, determines the purpose for which the personal information is needed and who can even outsource a part or all of the processing of the personal information to a third party who is referred to as an ‘operator’ in terms of POPI. Importantly though, despite the processing being outsourced to an operator, the responsible party still remains responsible for such processing, making it imperative that processing of personal information by operators must also be compliant with POPI.

The personal information your cellphone store receives when opening cellular accounts will qualify as personal information in respect of those clients who will also be seen as data subjects for purposes of POPI. Your actions of collection, storing and passing such information on to cellular providers will qualify as processing and since you determine the purpose of the processing, will qualify your business in this context as a responsible party under POPI. This means that POPI will apply to your business and that you will need to ensure that all your processing actions in relation to personal information are compliant with POPI.


Given that you also pass personal information on to other parties for specific actions in respect thereof, this may also be seen as passing information on to operators. This would require that you put proper operator agreements in place to ensure that the operators meet the requirements of POPI as you remain responsible for the operator’s actions in terms of POPI.

Bye-bye exemption clauses?

When a consumer and supplier conclude a contract, it is easy for a consumer to concern himself with the apparent key provisions of the contract such as the contract value, duration, payment terms; delivery dates etc. and not focus on clauses dealing with the exemption of liability of the supplier. In the past these exemption clauses were often one-sided, unfair and biased against the consumer prejudicially affecting the rights of the consumer against whom the exemptions were enforced. With the advent of the Consumer Protection Act (“CPA”) these clauses have been curbed. But are they completely outlawed, or can contracts still have exemption clauses?

The CPA was drafted to protect the consumer against illegal business practices, particularly where an unfair or unequal relationship exists between a consumer and supplier.

The CPA specifically prohibits suppliers from imposing exemption clauses on consumers that require a consumer to waive any rights; assume any obligation; or waive any the liability of the supplier on terms that are unfair, unreasonable or unjust or impose any such terms as a condition of entering into a transaction.

Section 49 of the CPA further provides that certain types of terms and notices in which there is a limitation of the risk or liability of a supplier, or where the consumer assumes a risk or liability, or where the consumer is required to indemnify the supplier, or where the consumer has to make an acknowledgement of any fact, must be written in plain language and the existence of the terms must be drawn to the consumer’s attention in a conspicuous manner and form that is likely to attract the attention of an ordinary alert consumer. Accordingly, it is insufficient to print this type of clause in small print in a place in the contract where the consumer cannot reasonably be expected to notice the terms. However, if the exemption clause is printed in contrasting typeface, or in bold, close to the primary terms of the contract where it is likely to be noticed by any consumer who reads the primary terms, this may be sufficient to comply with this requirement.

Furthermore a supplier seeking protection of an exemption clause in a contract will need to draw the exemption clause to the consumer’s attention at the negotiating stage of the contract and not after the conclusion thereof. This would require that the consumer’s attention be drawn to the specific highlighted clauses in the contract that hold risk for the consumer.

Where exemption clauses are inserted in a contract that do not meet the above requirements, the CPA allows the court to make an order severing the provisions or notices from the contract or declaring it to have no force or effect with respect to the transaction.

The CPA has thus introduced a balanced negotiation process between consumers and suppliers seeking to enter into contracts. Blatant unfair and unreasonable limitation of the rights of a consumer entering into a contract has now been removed, with any remaining exemptions required to comply strictly with the notice requirements of the CPA, curbing exemption clause abuse as encountered in the past.

As a consumer you must be aware of your rights. When entering a contract with its exemption clauses highlighted and brought to your attention, don’t just assume that the risks are appropriate. Consider the provisions carefully and understand the risks you are signing up for. Where you are unsure of the implications, rather obtain legal advice and gain a complete understanding. It may seem tedious, but it is better to be safe than sorry.

The impact of the delayed implementation of POPI on consumers

 “I’ve read in the media that the Information Regulator has again delayed the coming into operation of POPI Act. As a consumer, I’ve been waiting for this to happen to help stop the abuse one has to suffer from marketing emails, phone calls and the blatant and unauthorized sharing of my personal information. How long will this delay be and when can I expect my rights to start being protected?”


Your views and frustrations are shared by many consumers, and you are correct to note that the Information Regulator has again delayed the Protection of Personal Information Act 4 of 2013 (“POPI”) from coming into operation. Although we don’t know when POPI will become operational, it is anticipated that this will not be before 2019. Fortunately, it is not a case of if, but rather only when, as POPI has already been passed as legislation, with only its effective date postponed.

Although consumers are not without remedy now – there is legislation such as the Consumer Protection Act and the Electronic Communications and Transactions Act, that already afford consumers certain protection - it is frustrating, as the belief is that POPI will help address many of the broader challenges that consumers face, particularly in respect of the unscrupulous abuse of their personal information. 

POPI aims specifically to regulate the entities that receive and process personal information, including the parties they provide your information to downstream, to avoid abuse and unauthorised use and sharing of your personal information, including restrictions on cross-border transfer thereof. Further, it also imposes restrictions on directing marketing activities by electronic means, which has become a blight in the lives of many consumers.

Once POPI becomes operational, it will provide the necessary legislative framework to address many of the issues consumers face today and provide structures to help enforce such framework. Whether that will help curb these problems and within what timeframes, time will only tell, but the basis for such protection of privacy of our consumers will be properly laid.

Do Uber drivers qualify as employees?

This is a good question and one not so easy to answer. In South Africa, our labour laws provide for the following test to help determine whether someone is an independent contractor or an employee.

A person who works for, or renders services to, any other person is presumed, until the contrary is proven, to be an employee, regardless of the form of the contract, if any one or more of the following factors is present:

  • The manner in which the person works is subject to the control or direction of another person;
  • The person's hours of work are subject to the control or direction of another person; 
  • in the case of a person who works for an organisation, the person is a part of that organisation; 
  • The person has worked for that other person for an average of at least 40 hours per month over the last three months; 
  • The person is economically dependent on the other person for whom that person works or renders services; 
  • The person is provided with tools of trade or work equipment by the other person; or 
  • The person only works for or renders services to one person.  

This presumption does not apply to a person who earns more than the threshold determined by the Minister of Labour, currently set at R205 433.30 per annum. Where a person does earn above this threshold, the factors may however still be used as a guide to establish whether the person is an employee or not.

The presumption that an employment relationship exists if one of these factors are present will apply regardless of what the contract may say regarding the relationship. This means that all the evidence must be considered to determine what the actual nature of the relationship is.

In a recent CCMA case widely reported in the media, the CCMA found that Uber drivers do qualify as employees of Uber and are therefore protected by our labour laws as employees. The CCMA held that not only were drivers provided with the Uber technology platform as a tool of the trade, but they were also subject to Uber’s performance requirements and standards, thereby falling under the control of Uber. For the moment, it seems that Uber drivers are seen as employees and not independent contractors. One will however have to see whether Uber appeals the decision, and if such appeal leads to a different finding. The CCMA decision does align with decisions in other countries where Uber drivers have also been seen to be employees of Uber. Time will tell whether this position will remain to be the case also in South Africa.

Can my husband also be my business partner? 

South African law has recognized the existence of universal partnerships between spouses married out of community of property since as early as 1945. A universal partnership can be defined as a partnership where each of the parties contribute something towards the partnership - either money, skills or labor – and where the partnership is carried on for the benefit of both parties with the object of making a profit.


Our courts have recently been faced with the peculiar situation, similar to yours, where spouses who were married out of community of property without the accrual system, brought claims as to the existence of a universal partnership between the spouses. When spouses choose to marry out of community of property without the accrual, they essentially contract by way of an ante nuptial contract to each retain their own separate estate and no joint estate is formed. The peculiarity thus arises when, after the conclusion of such ante-nuptial contract, a spouse seeks to share in the profits of a partnership formed between the spouses, thereby contradicting the terms of the ante-nuptial contract.


Our law provides for two types of universal partnerships: 1) where the parties agree to share all their present and future property; and 2) where the parties agree to share all the property obtained from a commercial undertaking. The difference between these two partnerships is clear. In the former instance, the parties agree that they will share all their property that they have acquired and will acquire in the future – this can be termed a “non-commercial” partnership. In the latter instance, only the property acquired as a result of a commercial undertaking is shared – termed a “commercial” partnership.
Our courts have had no difficulty in concluding that “commercial” partnerships are valid in the law, even where spouses who are partners are married out of community of property without accrual. In a recent case the court held that spouses who concluded a partnership agreement for the establishment of a fish farm, was found to be a separate legal entity from their marriage, and that they could share in the profits, which would accrue to their separate estates, just as it would if they were normal business partners.


Where spouses did not sign a partnership agreement, our courts have held that in the case of a “commercial” partnership, a partnership can come into existence tacitly, and to determine if a tacit agreement exists, the courts will look at the words and conduct of the parties to determine whether such a partnership existed. Where the conduct of the parties is capable of more than one inference, the test for the existence of a tacit universal partnership is whether it is more probable than not that a tacit agreement had been reached. From this, it becomes clear that our courts are developing their own approach regarding the recognition of universal partnerships. 


In your case, in the absence of a clear partnership agreement confirming or denying the existence of a partnership, there is a strong possibility that your involvement with your husband in the family business provides grounds for being recognized as a tacit universal partnership, and that you would be able to have a claim for your share of the family business in the event of divorce. It is however recommended that you seek the assistance of a family law specialist to help you establish your position as well as to consider concluding a clear partnership agreement to avoid any future uncertainty.

What happens to my Bitcoins when I die? 

Bitcoin is essentially a digital payment network where Bitcoin currency is stored and transferred. A Bitcoin is a form of digital token that you can send or receive electronically, but is does not come in set amounts like a physical currency does, and can be divided up to 8 decimal places, meaning that the smallest amount you can send is 0.00000001 Bitcoins. The value of a Bitcoin also changes in much the same way that the value of stocks change based on bidding.

Bitcoins are protected by powerful cryptography which makes it a secure way to store your wealth, but it also creates the risk that when you die, it will be out of reach for your heirs. 

Bitcoins are stored in a virtual wallet which uses a string of random characters called a “public key”. The public key is visible to anyone as an address for sending and receiving the cryptocurrency. A separate “private key” however allows the owner access to the wallet’s contents. This means that when you die, your heirs may discover your Bitcoin wallet, but will be unable to gain access thereto without the private key.

The easiest way to ensure that your Bitcoins can be transferred to your heirs is to ensure that someone has a copy of the private key by writing it down, storing it on a memory drive or entrusting it with a company or a trusted financial advisor or attorney who can give it to your family after your death.

It is also a good idea to bequeath your Bitcoins formally in your will and identify who has a copy of the private key. Although it won’t form part of the physical assets of your estate to be administered, this will help ensure that there is no uncertainty as to whom you wanted to gain access to your wallet after your death.

I would suggest discussing your Bitcoin portfolio with your estate planner with a view to formally providing therefore in your will.

What to do when your new second-hand car breaks down?

Having bought the car from a second-hand dealer, means that the Consumer Protection Act of 2008
(“CPA”) will apply to your transaction. Importantly, a second-hand car falls within the definition of
‘goods’ in the CPA and is thus also subject to the CPA protection against defective goods, because
excluding second-hand goods from the ambit of the CPA would exclude protection for consumers
who need it most.

The CPA provides an automatic warranty that all goods purchased comply with the following
requirements in terms of the CPA:

  • safe, of good quality, in good working order and free from any defects;
  • reasonably suitable for the purpose for which they are generally intended; and
  • will be usable and durable for a reasonable period of time, having regard to the use they would normally be put to.

Should purchased goods fail to meet the requirements as set out above within six months after the
purchase or delivery of such goods you have the right to return them, and insist on one of the
following three remedies:

  • Have the goods repaired; or
  • Have the goods replaced; or
  • Obtain a full refund of the purchase price.

In general, if a consumer prefers to have the defective goods replaced or to have the purchase price
thereof refunded, the supplier must comply and cannot force the consumer to have the goods
repaired instead. The supplier is also liable for the costs of repairing, collecting and/or replacing the
defective goods. It is important to remember that the defect of the goods must be a material
imperfection to qualify for one of the three remedies. The CPA will also apply regardless of the
suppliers’ refund policy, unless the refund policy is more favourable towards the consumer.
In the case of second hand goods, there are exceptions to the rules regarding refunds in that they do
not apply if the consumer was specifically informed of the specific defects of the particular item and
the consumer still agreed to purchase the item in that condition or the goods were altered contrary
to the instructions, or after leaving the control, of the dealership.

In your case, it is realistic to accept that the standard and condition of a new car will differ from that
of a second hand car and that it’s not always possible for a second-hand car dealer to point out the
exact wear and tear of the car. That said, a second hand dealer should be in a position, due to the
nature of his business, to be able to point out known defects as well as bigger and obvious defects.
Should any defects, other than those listed and accepted by the consumer, occur within six months
after the delivery of any such goods, you will have the right to insist on one of the three remedies
listed above.

In your situation, if the condition of the engine was not disclosed, it can be argued that the need for
you to have to overhaul the entire engine is material and should afford you the protection and
remedies provided by the CPA.