Chapter 1 - Part B

Purpose, policy and application of Act
Purpose and policy of Act

3. (1) The purposes of this Act are to promote and advance the social and economic welfare of consumers in South Africa by –
    (a) establishing a legal framework for the achievement maintenance of a consumer and market that is fair, accessible, efficient, sustainable and responsible for the benefit of consumers generally;
    (b) reducing and ameliorating any disadvantages experienced in accessing any supply of goods or services by consumers –
      (i) who are low-income persons or persons comprising lowincome communities;
     (ii) who live in remote, isolated or low-density population areas or communities;
    (iii) who are minors, seniors or other similarly vulnerable consumers; or
   (iv) whose ability to read and comprehend any advertisement, agreement, mark, instruction, label, warning, notice or other visual representation is limited by reason of low literacy, vision impairment or limited fluency in the language in which the representation is produced, published or presented;

  (c) promoting fair business practices;
  (d) protecting consumers from –
(i) unconscionable, unfair, unreasonable, unjust or otherwise improper trade practices; and
(ii) deceptive, misleading, unfair or fraudulent conduct;
(e) improving consumer awareness and information and encouraging responsible and informed consumer choice and behaviour;
(f) promoting consumer confidence, empowerment, and the development of a culture of consumer responsibility, through individual and group education, vigilance, advocacy and activism;
(g) providing for a consistent, accessible and efficient system of consensual resolution of disputes arising from consumer transactions; and
(h) providing for an accessible, consistent, harmonised, effective and efficient system of redress for consumers.
(2) To better ensure the realisation of the purposes of this Act, and the enjoyment of the consumer rights recognised or conferred by this Act, the Commission, in addition to its responsibilities set out elsewhere in this Act, is responsible to –
(a) take reasonable and practical measures to promote the purposes of this Act and to protect and advance the interests of all consumers, and in particular those consumers contemplated in subsection (1)(b); (b) monitor and report each year to the Minister on the following matters:
 (i) The availability of goods and services to persons contemplated in subsection (1)(b), including price and market conditions, conduct and trends affecting their consumer rights; (ii) access to the supply of goods and services by small businesses and persons contemplated in subsection (1) (b); and (iii) any other matter relating to the supply of goods and services; and (c) conduct research and propose policies to the Minister in relation to any matter affecting the supply of goods and services, including proposals for legislative, regulatory or policy initiatives that would improve the realisation and full enjoyment of their consumer rights by persons contemplated in subsection (1)(b). Realisation of consumer rights 4. (1) Any of the following persons may, in the manner provided for in this Act, approach a court, the Tribunal or the Commission alleging that a consumer's rights in terms of this Act have been infringed, impaired or threatened, or that prohibited conduct has occurred or is occurring: (a) A person acting on his or her own behalf; (b) an authorised person acting on behalf of another person who cannot act in his or her own name; (c) a person acting as a member of, or in the interest of, a group or class of affected persons; (d) a person acting in the public interest, with leave of the Tribunal or court, as the case may be; and (e) an association acting in the interest of its members. (2) In any matter brought before the Tribunal or a court in terms of this Act – (a) the court must develop the common law as necessary to improve the realisation and enjoyment of consumer rights generally, and in particular by persons contemplated in section 3(1)(b); and (b) the Tribunal or court, as the case may be, must – (i) promote the spirit and purposes of this Act; and (ii) make appropriate orders to give practical effect to the consumer's right of access to redress, including, but not limited to – (aa) any order provided for in this Act; and (bb) any innovative order that better advances, protects,promotes and assures the realisation by consumers of their rights in terms of this Act (3) If any provision of this Act, read in its context, can reasonably be construed to have more than one meaning, the Tribunal or court must prefer the meaning that best promotes the spirit and purposes of this Act, and will best improve the realisation and enjoyment of consumer rights generally, and in particular by persons contemplated in section 3(1)(b). (4) To the extent consistent with advancing the purposes and policies of this Act, the Tribunal or court must interpret any standard form, contract or other document prepared or published by or on behalf of a supplier, or required by this Act to be produced by a supplier,to the benefit of the consumer – (a) so that any ambiguity that allows for more than one reasonable interpretation of a part of such a document is resolved to the benefit of the consumer; and (b) so that any restriction, limitation, exclusion or deprivation of a consumer's legal rights set out in such a document or notice is limited to the extent that a reasonable person would ordinarily contemplate or expect, having regard to – (i) the content of the document; (ii) the manner and form in which the document was prepared and presented; and (iii) the circumstances of the transaction or agreement. (5) In any dealings with a consumer in the ordinary course of business, a person must not – (a) engage in any conduct contrary to, or calculated to frustrate or defeat the purposes and policy of, this Act; (b) engage in any conduct that is unconscionable, misleading or deceptive, or that is reasonably likely to mislead or deceive; or (c) make any representation about a supplier or any goods or services, or a related matter, unless the person has reasonable grounds for believing that the representation is true. Application of Act 5. (1) This Act applies to – (a) every transaction occurring within the Republic, unless it is exempted by subsection (2), or in terms of subsections (3) and (4); (b) the promotion of any goods or services, or of the supplier of any goods or services, within the Republic , unless – (i) those goods or services could not reasonably be the subject of a transaction to which this Act applies in terms of paragraph (a); or (ii) the promotion of those goods or services has been exempted in terms of subsections (3) and (4); (c) goods or services that are supplied or performed in terms of a transaction to which this Act applies, irrespective of whether any of those goods or services are offered or supplied in conjunction with any other goods or services, or separate from any other goods or services; and (d) goods that are supplied in terms of a transaction that is exempt from the application of this Act, but only to the extent provided for in subsection (5). (2) This Act does not apply to any transaction – (a) in terms of which goods or services are promoted or supplied to the State; (b) in terms of which the consumer is a juristic person whose asset value or annual turnover, at the time of the transaction, equals or exceeds the threshold value determined by the Minister in terms of section 6; (c) if the transaction falls within an exemption granted by the Minister in terms of subsections (3) and (4); (d) that constitutes a credit agreement under the National Credit Act, but the goods or services that are the subject of the credit agreement are not excluded from the ambit of this Act; (e) pertaining to services to be supplied under an employment contract; (f) giving effect to a collective bargaining agreement within the meaning of section 23 of the Constitution and the Labour Relations Act, 1995 (Act No. 66 of 1995); or (g) giving effect to a collective agreement as defined in section 213 of the Labour Relations Act, 1995 (Act No. 66 of 1995). (3) A regulatory authority may apply to the Minister for an industrywide exemption from one or more provisions of this Act on the grounds that those provisions overlap or duplicate a regulatory scheme administered by that regulatory authority in terms of – (a) any other national legislation; or (b) any treaty, international law, convention or protocol. (4) The Minister, by notice in the Gazette after receiving the advice of the Commission, may grant an exemption contemplated in subsection (3) – (a) only to the extent that the relevant regulatory scheme ensures the achievement of the purposes of this Act at least as well as the provisions of this Act; and (b) subject to any limits or conditions necessary to ensure the achievement of the purposes of this Act. (5) If any goods are supplied within the Republic to any person in terms of a transaction that is exempt from the application of this Act, those goods, and the importer or producer, distributor and retailer of those goods, respectively, are nevertheless subject to sections 60 and 61. (6) For greater certainty, the following arrangements must be regarded as a transaction between a supplier and consumer,within the meaning of this Act: (a) The supply of any goods or services in the ordinary course of business to any of its members by a club, trade union, association, society or other collectivity, whether corporate or unincorporated, of persons voluntarily associated and organised for a common purpose or purposes, whether for fair value consideration or otherwise, irrespective of whether there is a charge or economic contribution demanded or expected in order to become or remain a member of that entity; (b) a solicitation of offers to enter into a franchise agreement; (c) an offer by a potential franchisor to enter into a franchise agreement with a potential franchisee; (d) a franchise agreement or an agreement supplementary to a franchise agreement; and (e) the supply of any goods or services to a franchisee in terms of a franchise agreement. (7) Despite subsection (2)(b), this Act applies to a transaction contemplated in subsection (6)(b) to (e) irrespective of whether the size of the juristic person falls above or below the threshold determined in terms of section 6. (8) The application of this Act in terms of subsections (1) to (7) extends to a matter irrespective of whether the supplier – (a) resides or has its principal office within or outside the Republic; (b) operates on a for-profit basis or otherwise; or (c) is an individual, juristic person, partnership, trust, organ of state, an entity owned or directed by an organ of state, a person contracted or licensed by an organ of state to offer or supply any goods or services, or is a public-private partnership; or (d) is required or licensed in terms of any public regulation to make the supply of the particular goods or services available to all or part of the public. Threshold determination 6. (1) On the early effective date as determined in accordance with item 2 of Schedule 2, and subsequently at intervals of not more than five years, the Minister, by notice in the Gazette, must determine a monetary threshold applicable to the size of the juristic person for the purposes of section 5(2)(b). (2) The initial threshold determined by the Minister in terms of this section takes effect on the general effective date as determined in accordance with item 2 of Schedule 2, and each subsequent threshold takes effect six months after the date on which it is published in the Gazette. Requirements of franchise agreements 7. (1) A franchise agreement must – (a) be in writing and signed by or on behalf of the franchisee; (b) include any prescribed information, or address any prescribed categories of information; and (c) comply with the requirements of section 22. (2) A franchisee may cancel a franchise agreement without cost or penalty within 10 business days after signing such agreement, by giving written notice to the franchisor. (3) The Minister may prescribe information to be set out in franchise agreements, generally, or within specific categories or industries.