Cooling Off Period

Be cool – the right of cooling off

In our law a person usually can’t get out of a contract simply because he changes his mind. One needs a good reason to cancel. However, because of the pressure selling of door-to-door salespeople and unsolicited contracts, laws around the world have given consumers certain cooling-off rights to cancel a contract within a defined number of days. Here are examples of such rights in South Africa.

The National Credit Act

The National Credit Act limits the cooling-off right to leases and instalment agreements entered into at a location other than the registered business premises of the credit provider. A typical example of this is where a consumer buys books on instalments from a Readers’ Digest salesman at his home.

The consumer has 5 business days (excluding weekends and public holidays) after he signs the contract to get out of it. To do so, he must give notice of termination to the credit provider in writing (delivered by hand, fax, email or registered mail) and tender return of any goods he received. Within seven days of the written notice, the credit provider must, in turn, refund any deposit the consumer may have paid.

Unless the consumer hand delivers the goods to the credit provider it is entitled to deduct the reasonable cost of getting the goods back. Similarly, if the goods are not in their original packaging and have been used, the credit provider is entitled to the reasonable cost of restoring the goods to their pre-delivery condition.

Obviously, these rights are open to disputes that may end up in court. Credit providers will probably stipulate in their instalment sale agreements an amount that the parties agree will represent damages, depreciation, etc, if the goods are returned.

So if you have a change of heart, make sure you don’t use the goods, keep the original packaging and deliver them to the credit provider and get a representative to acknowledge in writing that the goods were returned in pristine condition.

The Consumer Protection Act

Section 16 of the CPA allows a consumer to rescind a transaction that came about as a result of direct marketing, without reason or penalty. The consumer merely needs to give the supplier written notification of his or her intention to rescind the agreement, and this notification must be given within 5 business days of the transaction being concluded or, within 5 business days of the goods being delivered to the consumer. Where the transaction entailed goods being delivered to the consumer, then the consumer must return the goods to the supplier at the consumer’s risk and expense, and the goods must be returned to the consumer within 10 business days after the goods were delivered to the consumer.

The Alienation of Land Act

A purchaser of land has five business days after signature of an offer to purchase to revoke the offer by giving written notice to the seller or his or her agent. The written notice must be signed by the purchaser or his or her agent acting on his or her written authority, must identify the offer that is being revoked and must be unconditional.

Where an offer is revoked the seller shall refund the full amount of any deposit he received to the purchaser within 10 days of the date on which the notice was delivered to the seller or his or her agent.

This five-day cooling-off period will not apply if:

  • the purchase price of the land, or the price offered for the land by the prospective purchaser exceeds R250 000 or such higher amount as the Minister may prescribe in order to counter the effect of inflation;
  • the purchaser or prospective purchaser is a trust or a person other than a natural person;
  • the purchaser or agent purchased the land at a publicly advertised auction;
  • the seller and purchaser had previously entered into a deed of alienation of the same land on substantially the same terms;
  • the purchaser had reserved the right to nominate another person to take over his rights and obligations in the offer;
  • the purchaser purchased the land by the exercise of an option which was open for exercise for a period of at least five days.

Neither the seller nor his agent is entitled to any remuneration or damages if the contract is terminated. A condition in the offer to purchase imposing a penalty or fee on the purchaser should he or she exercise the cooling-off rights shall be void. Similarly, any waiver by a purchaser of the rights conferred upon him or her, shall also be void.

The Children’s Act

Section 233 provides that the parent/s or guardian of a child and the child himself must consent to the adoption of a child. Each has 60 days to reconsider and withdraw such consent. The children’s court may not grant an order of adoption before the expiration of the 60-day period.

If a child over the age of ten years (or, if under the age of 10 years, is of an age, maturity and stage of development to understand the implications of such consent) has given consent to his or her adoption, such consent may be withdrawn at any time before the order of adoption is made by the children’s court.

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