A sale of goods is never just about a supplier selling goods to a consumer, and simply applying whatever terms they wish to the transaction. The Consumer Protection Act (CPA) applies to these transactions and provides consumers with a number of rights. Every supplier should care about the CPA’s effects. It means that every supplier whose transactions the CPA applies to should care about the quality of the goods they supply, the method, time and place of delivery, and the fitness of the goods for specified purposes – amongst other considerations. Suppliers who don’t cater for these considerations expose themselves to significant risks. Unsatisfied consumers could, for example, approach the National Consumer Commission (NCC) to order those suppliers into providing refunds, returns or repairs. There’s also the risk of a supplier suffering reputational damage as a result of failing to cater for the rights of consumers. Whether it is reputational damage or having to refund a consumer, ultimately, the supplier’s bottom-line takes a huge hit. They lose money. How does a supplier ensure that they protect their interests while at the same time not infringing the rights of consumers?
The CPA and ECT Act on the sale of goods
The CPA has the following provisions that apply to the sale of goods:
- Section 18 of the CPA provides consumers with a general right to choose or examine goods. This means that a consumer is entitled to ensure that the goods they purchase are of the right quality and type, and are fit for the purpose that the goods are generally meant for or the one the consumer informed the supplier of.
- Section 56 reinforces this right by inserting into every transaction, an implied warranty of quality that suppliers can’t remove from the agreement, and gives consumers the right to demand quality goods.
- In terms of section 17 of the CPA, consumers also have a general right to cancel a goods order that they have made, but only if those goods weren’t acquired specially for them (a special order, in other words).
- In terms of section 19 of the CPA, a supplier is generally responsible for the delivery of goods, unless the agreement between the parties provides differently. This includes delivery being at the cost of the supplier, the consumer having a reasonable opportunity to examine the goods, and the delivery taking place on a specified date or within a reasonable time, at the agreed address.
- Section 20 also entitles the consumer to a right to return goods and receive a full refund under certain circumstances, including goods that aren’t fit for a particular purpose or are unsafe or defective.
Apart from the CPA, the Electronic Communications and Transactions Act (ECT) is another law that applies to consumer transactions, but only for online transactions such as buying electronic gadgets from an online store:
- Where a consumer concludes an online transaction, section 44 of the ECT Act allows that consumer a seven-day cooling-off period in which they can cancel the online transaction without providing any reason or incurring a penalty for the cancellation.
- The CPA, in section 16, also has a cooling-off period, but only in respect of goods sold to the consumer after direct marketing, and only for a period of 5 business days.
The terms of a sale of goods
It is important to have terms that carefully and clearly set out the nature and extent of the rights of the consumer regarding the goods they buy from a store. This means that the terms have to address important issues such as when a consumer can:
- return goods
- receive a refund
- or ask for a repair
The terms also have to be balanced and not unfairly in favour of the supplier. The supplier can prominently display these terms on the website of their online store, or in a brick-and-mortar store, on the wall or issued as part of paperwork given to the consumer when they buy the goods at the store. These terms have to be drafted and displayed in such a way that they draw the consumer’s attention to all the clauses that substantially affect the consumer’s rights.
Actions you can take
- Manage your relationship with consumers by asking us to draft terms that are in plain language and comply with the law.
- Comply with the CPA’s plain language requirement by making your terms easy-to-read with our Plain Language Review
- Alert your consumers about when you’ll accept or reject a return of goods by asking us to provide you with a Returns Policy that is in plain language and line with the CPA.
- Make your website comply with the CPA and ECT Act by asking us to draft you the right Legal Notices.