Does the Consumer Protection Act, 2008 (“CPA”), which became effective on 1 April 2011, mean the end of the “voetstoots” or “as is” clause?
When you buy something, there is an implied warrantee that the thing sold is free from any defects. It is, however, possible that one can contract out of this implied warranty by inserting a term into the contract that says that the sale is voetstoots (that you buy the goods “as is” [warts and all] and cannot rely on the implied right to defect-free goods and complain later if you find certain defects in the goods).
The common law does, however, allow you to cry foul and sue the seller (even if the contract contained a voetstoots clause) for cancellation of the contract or a reduction in the selling price where the goods were defective at the time of the sale, that the seller knew of the defect but failed to disclose it to the buyer, knowing full well that if the buyer knew about it he would either not have continued the purchase or would have negotiated a more favourable purchase price.
In terms of the CPA the consumer is entitled to receive goods that are reasonably suitable for the purpose for which they are generally intended, are of good quality, in good working order and free of any defects.
The definition of “goods” has been amplified to include a legal interest in land or other immovable property.
The CPA provides for a statutory duty of disclosure in consumer transactions. The Act expands on the common law obligation to disclose latent defects by requiring suppliers to disclose material facts and to correct misapprehensions on the part of the consumer, if failure to do so would amount to a deception.
However, sellers can exclude themselves from this obligation by advising the consumer that the goods are being offered in a certain condition. The consumer must then agree to accept the goods in that particular condition. E.g. a motor dealer should explain that the beat-up Volksie is not new, point out the obvious and not-so-obvious defects and if the consumer accepts this, then the sale would be as-is.
The only way sellers can get past the implied warranty is to describe the condition of the goods in specific detail to make it clear in which condition the goods are being sold. The buyer then has to has to “expressly agree” to accept the goods. Only if the buyer “knowingly acted in a manner consistent with accepting goods in (a less than ideal) condition” would the implied warranty of quality fall away. Every defect must be described in the contract of sale that the buyer signs.
A defect is a material imperfection that renders goods less acceptable or less practicable. This includes obvious problems, or latent defects, and those hidden future problems, or patent defects, which sellers are able to escape under the voetstoots clause provided they were not aware of such defects at the time of sale.
If any defects come to light after sale or goods do not comply with standards set out in the CPA, the buyer is entitled to return them within six months of a sale and the Act holds businesses liable to either repair or replace the goods, or to refund the purchaser. After a defective product is repaired, the repair job itself will have a further three-month warranty. In addition to these rights provided to consumers under the CPA, the CPA also provides further should any damages arise as a result of defective goods, they would be able to claim damages from the seller.
Time and case law will determine if the CPA has sounded the death knell of voetstoots clauses, but whatever its fate, the consumer is infinitely better off under the CPA.
Bregman Moodley Attorneys Inc. 2015/089214/21
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