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The Consumer Protection Act - the implications for your business

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lawbook.jpgAs the wild-west landscape in which some of South Africa’s retail and related business has been conducted is finally tamed by the new Consumer Protection Act, consumers and businesses will have to redefine their relationships, recognise a fresh equality of power and tread very carefully in navigating new ground.

Consumers will be armed with more power than ever before:

  • The ability to make informed choices based on comprehensive and accurate labelling of products (Does it contain Genetically Modified Organisms? Is it genuinely new, or actually just reconditioned?)
  • The right and tools to block all spam, junk mail and marketing telephone calls (Yes, they can ensure that only people they actually know and want to talk to can contact them)
  • The power to cancel a sale or reservation without being unfairly penalised
  • Protection from dishonest or misleading forms of marketing (No more inertia marketing and if they didn’t actually win a competition, you can’t say that they did)

The upside for small businesses

Obviously, consumers have every reason to smile, but the Act also holds less obvious benefits for small businesses. If properly implemented, the Act will prevent competitors from undermining your business through unfair or dishonest marketing or business practices. Business planning is simpler when everyone is “playing fair”. 

In addition, the Act defines “consumers” to include corporations with an asset value or annual turnover of less than R3 million. So small businesses purchasing goods or services from their suppliers, will have the same rights and protection as ordinary consumers.

What can’t be ignored, however, is the critical impact that the Act has on the terms and conditions that businesses will in the future be entitled to impose when contracting with their customers. 

Terms and Conditions apply

Almost all established businesses ensure that their customers sign “Standard Terms and Conditions” if they are seeking credit or goods and services of a substantial value.  These vital terms prevent future disputes and give the business essential protection against non-payment, product or service liability and other related issues of crucial importance.

Most businesses incur the legal expense of obtaining “Standard Terms and Conditions” only once, and then rest easy in the protection that the terms offer. But the Act includes sweeping prohibitions that make many of the contractual terms previously included in this agreement illegal or unenforceable so that businesses will now need to obtain a new document if they are to properly protect their business interests and avoid administrative fines. 

The question is how to achieve this without overburdening your business with legal expenses that it can ill-afford in hard-pressed economic times. Careful selection of a reliable commercial attorney charging reasonable rates (yes, they can sometimes be found) is one option. 

Another option is to capitalise on recent innovations in the legal profession which sees legal professionals partnering with information technology specialists to deliver customised legal solutions via the internet at competitive pricing.

Whatever, steps you take to protect your business, one thing is certain – consumers’ rights are here to stay and a business which fails to adapt to the changing landscape cannot expect to escape the far-reaching impacts of the Act and the new legal era that it ushers in.

Article written by Richard van Helden, Director of Legal Services at Law Unlocked, e-mail: richard@lawunlocked.co.za. The website www.lawunlocked.co.za is generally regarded as the current market-leader in the provision of web-based legal solutions, offering fully customised legal documents online and delivered the same day.

Copyright (c) 2016, the credited author
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