The point of departure for most contracts is that you have the freedom of contract. This, simply put, means that the terms and conditions can be freely decided between the parties who must give their agreement thereto, and the only obligation is that these terms and conditions must be lawfully possible. In recent years however, this absolute freedom has been qualified to encapsulate certain requirements such as set out in the Consumer Protection Act 68 of 2008 (“The CPA”).

It is worth pointing out that the CPA now requires more stringent measures to be taken by a supplier/employer/service provider (These persons will be referred to further as suppliers collectively for ease) for the transactions or agreements entered into with potential clients/consumers. Section 49 of the CPA now requires that a supplier must make a consumer specifically alert to certain provisions of the agreement, before they enter into them.

The CPA sets out the types of terms and conditions which must be brought to the specific attention to a consumer, and in Section 49(1) and Section 49(2). This requirement is summarised in lay man’s terms as, a supplier must notify a consumer and direct their specific attention to certain terms and conditions which fall under Sections 49(1) and Section 49(2), such as terms and conditions of an “Unusual character or nature”. It is important that both suppliers and consumers familiarise themselves with terms and conditions which might fall under these sections.

This places the strain and burden more on the suppliers to ensure that their consumers are made aware of the terms and conditions of an agreement, and should they fail to do so it could leave the contract void or unenforceable. A consumer’s freedom to contract, and the old adage which holds “Let the signer beware”, is no longer an absolute foundation on which a businessman may stand.

What is of even more importance, a supplier is further expected to be held to a much higher standard of reasonability when it comes to the supply of goods and services. Section 48 of the CPA houses where terms and conditions of a contract are unfair, unreasonable or unjust, that the agreement itself will be placed in jeopardy. This is a fine line which one must trot in consideration of allowing a consumer to get away with a bargain, and a supplier taking care to turn a profit. Section 48 is done with purpose to allow for transactions and agreements to flow, whilst they bear due care and diligence to the principles of fairness, reasonability and of being just and equitable.

Section 48, for example, holds that contracts and agreements can no longer be of such a one-sided nature in favour of one party or the other, that their implementation would be unreasonable or unjust.

This has also come into conflict with what businessmen and women have come to know as the “Parol evidence rule”. This rule holds that where the parties have signed a contract or agreement in which all the terms and conditions are housed, cannot give evidence on the circumstances or any other extrinsic evidence to assist in interpreting the agreement, because they did not include such information in the contract.

However the CPA allows for Courts and Tribunals to take into consideration certain aspects and circumstances in which the parties found themselves, and discussed before the signing of the agreement. The Courts and Tribunals are given this opportunity to ensure that they can ascertain the reasonability of the contract and its terms and conditions. For the Courts and Tribunals to test this, they must have cognisance of factors outside of what is specifically contained in a contract.

The above list is not exhaustive of all the changes which have been made by the Consumer Protection Act, and although it seems as if the Act is more sided in the favour of the Consumer, it does indeed give protection to the suppliers in just the same way.

The economic foreground in which South Africa finds itself in the modern era is continuously adapting and making room for improvements. The Consumer Protection Act is meant to give more security to both parties. The rights and obligations on both a consumer and a supplier has been changed to a great degree because of the CPA. However, this gives further opportunity for improvement on both the consumer, as well as the supplier’s fronts.

Contracts Freedom