Does your company sell goods or services? If so, it is likely that your terms and conditions (Ts & Cs) in your application for credit form are one-sided in your favour.

Chapter 9 of the Consumer Protection Act (CPA) deals with the Right to Fair, Just & Reasonable Terms & Conditions.

Sections 48 and 49 provide that:

•  Suppliers must not offer to supply or enter into an agreement to supply goods or services on terms that are unfair, unjust or unreasonable.
• Suppliers cannot also require that a consumer waives any rights, assumes any obligations or limit the supplier’s liability on terms that are unfair, unreasonable or unjust.
• Terms, conditions, agreements and transactions shall be deemed to be unfair, unreasonable or unjust if they excessively favour another person other than the consumer to whom the goods or services are supplied. Further, terms or conditions that are adverse to the consumer in that they are inequitable shall also be deemed to be unfair.
• Any provision or notice that limits the supplier’s liability must be specifically drawn to the consumer’s attention and must be in plain language, prior to the consumer entering into the agreement.
• This notice or provision must be in a conspicuous manner and form that is likely to attract the attention of an ordinarily alert consumer.

Prior to the implementation of the CPA, our courts often found that provisions whereby one person limited his or her liability must be in plain language and be detailed in a conspicuous manner. InMercurius Motors vs Lopez 2008(3)SA 572(SCA) a motor car repairer was found liable for the theft of a customer’s motor vehicle despite the customer having signed a contract that contained provisions limiting the motor car repairers liability for the theft of the motor vehicle. The decision in this case has now been formalized and entrenched in section 49 of the CPA.

If your Ts & Cs contain terms that are unreasonable or one-sided in your favour (e.g. the right to cancel an advertising order without furnishing reasons and without financial consequence) it is likely that the offensive clause will be struck down by a court.

At this stage, and until the effect of the chapter becomes clearer, over time, you could consider either watering down some clause or, in the alternative, to precede the Ts & Cs with something like this (in bold):

In the following clauses, the consumer is required to waive certain of its rights, assume certain obligations of the supplier and agree to a limitation of the supplier’s liability. By its signature to or initialing of these terms, the consumer acknowledges, understands and accepts that these terms may favour the supplier or require that the consumer waives any rights, assumes any obligations or limits the supplier’s liability.

This complies with the requirement that any provision or notice that limits the supplier’s liability must be specifically drawn to the consumer’s attention and must be in plain language, prior to the consumer entering into the agreement. It does not necessarily mean that certain terms are not unfair, unreasonable or unjust, or don’t excessively favour the supplier, and can be set aside by a court. But let’s not anticipate that now.

Of course, the contract must be signed by the consumer, or the terms must be specifically brought to its attention.