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The CPA: Cancellations & Deposits

Legal advise on the South African Consumer Protection Act regarding Cancellations, Penalties and Non-Refundable Deposits in tourism.

NOTE: The Risk in Tourism series (The Law: Contracts) will continue with Part 18 in a future edition.

– Part 1 –

This is most probably the application of the CPA that has most often ‘reared its head’ in the travel and tourism industry – various sections of the CPA applies so let’s look at each of them and then provide you with an executive summary:

THE COMMON LAW

This document suggests that the CPA has not revoked the common law per se. Thus such common law duties as caveat emptor and caveat subscriptor, especially read with my first point above, are in my view ‘alive and well’.

Section 2 (10): Interpretation – also states that: ‘No provision of this Act must be interpreted so as to preclude a consumer from exercising any rights afforded in terms of the common law’

Section 4 (2): Consumer Rights states that ‘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)’ (SEE BELOW)

Section 56 (4): Implied Warranty specifically states that the implied warrant contained in section 56 (1): ‘… applies in addition to any other implied warranty or condition imposed by the common law’.

The above may be read to imply that whilst consumer common law rights are retained and in fact enhanced, supplier common law rights have been revoked – I don’t believe that to be the correct reading or implication of the CPA as inter alia the rules of interpretation clearly states that such a meaning must be unequivocal, which I do not believe to be the case.

SECTION 3: PURPOSE & POLICY

This section strengthens my argument above, namely in the choice of words addressing consumer behaviour:
‘encouraging responsible and informed consumer choice and behaviour’ [Section 3 (1)(e)]:
‘the development of a culture of consumer responsibility’ [Section 3 (1)(f)]:

It means in my view that a consumer cannot act recklessly and without due regard (i.e. irresponsibly) to common law principles (see previous paragraph) and then ‘rely on/call upon’ the CPA to ‘rescue’ him/her. However care should be taken by the supplier when dealing with consumers that fall into the following categories [Section 3 (1)(b)]:
• low-income persons or persons comprising low-income communities;
• live in remote, isolated or low-density population areas or communities;
• seniors or other similarly vulnerable consumers;
• 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 [Read with Section 40 (2) Re ‘Unconscionable Conduct’].

SECTION 4: REALIZATION OF CONSUMER RIGHTS

See in the two previous paragraphs the duty placed on the supplier vis a vis consumers that fall into the section 3 (1) (b) categories.

Section 4 (3) & (4) in addition directs any ‘Tribunal or Court’ to adopt the following approach when assessing documents that govern the relationship between the consumer & the supplier – it is VERY onerous for suppliers & must be borne in mind when not only drafting documents (e.g. T&C) but when engaging in the sales process (i.e. ‘circumstances of the transaction’):

Section 4 (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.

Section 4 (4): 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.

To be continued in the March 2016 edition of the Tourism Tattler Trade Journal.

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