THE GUNSTONS BLOG

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Consumer Protection Act: The practical stuff.

The general theme of the Act is to protect the poor and the vulnerable. One could say that it is a form of a Bill of Rights for the consumer. Here are 5 aspects of the CPA that might affect you.

1. South African consumers will now be amongst the most protected consumers in the world. If you are a consumer, this sounds like fantastic news, however suppliers will probably pass the costs of this protection onto the consumer. Just how much consumers will pay for this extra protection remains to be seen.

2. Consumers now have the right to inspect goods before purchasing, including intangible goods such as software. You may request to inspect your potential purchase in-store, before going home so as to ensure you do not find something missing or broken upon unwrapping the goods at home.

3. All agreements and contracts that you enter into must be provided in plain and understandable language and the providers of goods and services have an obligation to explain the terms of the contract to one. If after 1 April 2011, these requirements are not met a consumer may have grounds for unconscionable conduct and this may be a reason for you to terminate a contract. If you are a provider of goods or services you may wish to review your contracts especially if you don’t understand or cannot explain the clauses!

4. Entrepreneurs and business owners: If you are currently The John Smith Empire (Pty) Ltd, trading as Johnny’s Plumbers (or any variant of this example) you will have to register the business name Johnny’s Plumbers. Significantly shareholders agreements in conflict with the registered founding documents will be invalid. It is therefore recommended that the you contact your attorney to make the necessary changes to your company’s founding documents.

5. Should you have a cell phone contract you will be able to cancel the contract by giving 20 days written notice to the cellular service provider. Of course you will have to give your handset back, but you will not be locked into paying the monthly sum for the remainder of the typical two year period.

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