The Consumer Protection Act 68 of 2008 and Procedural Fairness in Consumer Contracts

In general, the concept "contractual fairness" can be narrowed down, described and analysed with reference to the two interdependent types of fairness – substantive and procedural fairness. Measures aimed at procedural fairness in contracts address conduct during the bargaining process and generally aim at ensuring transparency. One could say that a contract is procedurally fair where its terms are transparent and do not mislead as to aspects of the goods, service, price and terms. Despite the noble aims of legislative measures aimed at procedural fairness there are certain limits to the efficacy of procedural measures and transparency. The special procedural measures which must be considered in terms of the Consumer Protection Act 68 of 2008 in order to decide if a contract is fair are analysed in this article, as are other measures contained in the Act, which may also increase procedural fairness, and are discussed so as to allow suppliers to predict whether their contracts will be procedurally fair or not in terms of the Act. The special procedural measures can be categorised under measures requiring disclosure and/or mandatory terms, and measures addressing bargaining position and choice. It is concluded that owing to the nature of all these factors and measures related to procedural fairness, it is clear that openness and transparency are required by the CPA.   &nbsp

What matters more for South African households’ debt repayment difficulties?

While the increased access to consumer credit has helped many families improve their welfare, the rising repayment burdens upon a background of chronically law savings rate have generated concerns that South African families are becoming ever more financially fragile and less able to meet their consumer debt repayment obligations. Using data from the Cape Area Panel Study (CAPS), this paper investigates whether consumer debt repayment problems are better explained by excessive spending which leaves households financial overstretched or by negative income shocks. The results indicate that households are significantly more likely to be delinquent on their financial obligations when they suffer negative events beyond their control rather than due to the size of the expenditure burden. This suggests that some consumers will experience repayment problems even when they borrow within their means. Thus regulatory efforts to improve mechanisms for debt relief might be more meaningful than restrictions on lending

Unpacking the Right to Plain and Understandable Language in the Consumer Protection Cct 68 of 2008

The Consumer Protection Act 68 of 2008 came into effect on 1 April 2011. The purpose of this Act is, among other things, to promote fairness, openness and respectable business practice between the suppliers of goods or services and the consumers of such good and services. In consumer protection legislation fairness is usually approached from two directions, namely substantive and procedural fairness. Measures aimed at procedural fairness address conduct during the bargaining process and generally aim at ensuring transparency. Transparency in relation to the terms of a contract relates to whether the terms of the contract terms accessible, in clear language, well-structured, and cross-referenced, with prominence being given to terms that are detrimental to the consumer or because they grant important rights. One measure in the Act aimed at addressing procedural fairness is the right to plain and understandable language. The consumer’s right to being given information in plain and understandable language, as it is expressed in section 22, is embedded under the umbrella right of information and disclosure in the Act. Section 22 requires that notices, documents or visual representations that are required in terms of the Act or other law are to be provided in plain and understandable language as well as in the prescribed form, where such a prescription exists. In the analysis of the concept “plain and understandable language” the following aspects are considered in this article: the development of plain language measures in Australia and the United Kingdom; the structure and purpose of section 22; the documents that must be in plain language; the definition of plain language; the use of official languages in consumer contracts; and plain language guidelines (based on the law of the states of Pennsylvania and Connecticut in the United States of America).Keywords: Plain language (plain and understandable language), Transparency, Procedural fairness, Consumer rights, Consumer contracts; Contractual fairness

The National Credit Act Regarding Suretyships and Reckless Lending

In terms of the National Credit Act a credit provider may conclude a credit agreement with a consumer only after he has made a proper financial assessment and concludes that the consumer will be able to satisfy all of his obligations under all his credit agreements. However, a practice of not conducting this affordability assessment has evolved amongst certain credit providers where the credit agreement involved is a suretyship agreement. This article investigates whether or not a suretyship agreement is indeed a credit agreement in terms of the National Credit Act, and if a financial assessment should be conducted in the case of a suretyship agreement. The main aim of the article is to try to identify what the concept of a “credit guarantee”, as defined in the Act, encompasses and ultimately if the common-law contract of suretyship falls under this definition. Our conclusion is that “credit guarantee” is as vague and problematic as many of the other definitions in the Act. If one reads the Act in its entirety (including the regulations to the Act), it seems unlikely that the legislature intended not to regulate common-law suretyships also.Keywords: National Credit Act; credit guarantees; suretyship; guarantees; reckless credi

Fundamental Consumer Rights Under the Consumer Protection Act 68 of 2008: A Critical Overview and Analysis

South Africa was in need of a comprehensive framework of legislation, policies and government authorities to regulate consumer-supplier interaction. The Consumer Protection Act 68 of 2008, which was signed by the President of the Republic of South Africa on 29 April 2009 and published in the Government Gazette on 29 April 2009, now provides an extensive framework for consumer protection and aims to develop, enhance and protect the rights of consumers and to eliminate unethical suppliers and improper business practices. Certain areas of the common law regarding consumer rights have been codified by the Act and certain unfair business practices that were previously unregulated are now governed by the Act. The Act has a wide field of application. It applies to every transaction occurring within South Africa for the supply of goods or services or the promotion of goods or services and the goods or services themselves, unless the transaction is exempted from the application of the Act. The Act also specifically regulates aspects of franchise agreements. In terms of the Act, consumers obtain several new rights and some existing rights are broadened and reinforced. These rights are: the right to equality in the consumer market; privacy; choice; disclosure and information; fair and responsible marketing; fair and honest dealing; fair, just and reasonable terms and conditions; and fair value, good quality and safety. The last right in terms of the Act deals with a supplier's accountability to consumers. The authors critically analyse and discuss these rights. It is clear that the Act is written in favour of the consumer. Various provisions of the Act make inroads into the common-law position to strengthen the position of the consumer vis-à-vis the supplier and suppliers are undoubtedly facing an onerous task to prepare to comply, and eventually attempt to comply, with the Act. Although the Act has its own interpretation clause, which provides that it must be interpreted in a manner that gives effect to the purposes of the Act, the Act poses many uncertainties and interpretational and practical challenges. Many questions are therefore raised, some of which remain unanswered. These questions illustrate some of the uncertainties concerning the scope and possible interpretation of the fundamental consumer rights.Keywords: Contract law; consumer protection; consumer rights; equality; privacy; choice; disclosure and information; fair and responsible marketing; fair and honest dealing; fair or unfair contract terms; fair value; quality and safety; product liability

Do end users really have a place in the design arena when safe design is critical?

There is a global trend towards more highly automated traffic man-agement systems. Problematic to increased automation are the higher levels of system integration and associated complexity and uncertainty this brings. This study explored whether end-user participation in new project design and imple-mentation can contribute to the smooth and effective introduction of these new systems for railway control rooms. Results showed that almost all participants agreed that end-user input is important to the success of new technology. Howev-er, experiences shared by interviewed controllers highlighted that end-user partic-ipation in major projects is underutilized and that certain types of involvement or action can actively hinder the implementation process. The authors anticipate that the experiences of controllers can enhance decision-making associated with end-user participation during the introduction of new traffic management systems. The authors also anticipate that end-user participation will advance improved human system integration