What the Consumer Protection Act Means for Your Business

Who Does the CPA Apply To?

The Consumer Protection Act 68 of 2008 (CPA) applies to every transaction in South Africa in which a supplier supplies goods or services to a consumer in the ordinary course of business. It covers:

• Retailers, wholesalers, and manufacturers.
• Service providers of all kinds — from plumbers to professional service firms.
• Franchisors and franchisees.
• Direct marketers.

The CPA does not apply to transactions between businesses where the consumer is a juristic person with an asset value or annual turnover above R2 million. It also does not apply to employment contracts or credit agreements (which are governed by the NCA).

Key Obligations for Suppliers

Plain and Understandable Language

All consumer agreements, notices, and documents must be in plain and understandable language. A document is in plain language if a person of average literacy and minimal experience of contracts can understand it. Legalese, defined terms buried in schedules, and cross-references to other documents are all problematic.

Disclosure of Material Information

Suppliers must disclose all material information that a consumer would reasonably need to make an informed decision. Failure to disclose material information can constitute a misleading representation.

Fixed-Term Contracts

Under section 14 of the CPA, a consumer has the right to cancel a fixed-term contract on 20 business days' written notice, subject to a reasonable cancellation penalty. The supplier must notify the consumer of the impending renewal of a fixed-term contract and the consumer's right to cancel. Automatic renewal without notice is unlawful.

Right to Return Goods

Consumers have the right to return goods within six months of delivery if the goods are defective, not of good quality, or not fit for the purpose for which they were purchased. The supplier must repair, replace, or refund — at the consumer's election.

Prohibited Contract Terms

Section 48 of the CPA prohibits unfair, unreasonable, or unjust contract terms. A term is unfair if it is excessively one-sided in favour of the supplier, or if it would be inequitable to enforce it. Courts and the National Consumer Tribunal can declare such terms void.

Cooling-Off Period for Direct Marketing

Where goods or services are marketed directly to a consumer (door-to-door, telephone, or online), the consumer has five business days to cancel the transaction without penalty.

Consequences of Non-Compliance

Non-compliance with the CPA can result in:

• Complaints to the National Consumer Commission (NCC) or a recognised consumer protection group.
• Referral to the National Consumer Tribunal, which can impose fines of up to 10% of annual turnover or R1 million (whichever is greater).
• Civil liability to affected consumers.
• Reputational damage.

How ClauseWise Can Help

ClauseWise reviews and drafts consumer-facing contracts to ensure CPA compliance at fixed prices. We also assist with NCC complaints and responses. Submit an intake form to get started, or visit our Free Legal Resources page.

ClauseWise provides independent commercial legal support, contract review, dispute resolution support, business risk advisory and document review services to individuals and businesses across South Africa. Where a matter requires formal legal representation, ClauseWise may facilitate an appropriate referral to an independent suitably qualified attorney or advocate through its established panel network.