How does the Consumer Protection Act affect voetstoots clauses?

16 March 2020 ,  Salomé van Wyk 1780

When one indicates that they are selling property “voetstoots”, they are selling “as is”, whereby what you see is what you get and thus excusing themselves from any liability in the future, in the event that any latent or patent defects present themselves. By including this clause, the problems that continue at sale become the purchasers’ problem and no longer that of the sellers’. The Consumer Protection Act (CPA) has put a limitation on the application of the “voetstoots” clause in stating that “service providers or suppliers” can no longer rely on the clause to avoid liability for defects they were aware of and the CPA appears to eliminate the significance of the “voetstoots” clause.

However, this only applies in instances where transactions find application under the CPA. There are two important stipulations. The first being that the CPA only applies to transactions which are decided in the ordinary course of the suppliers’ business. And secondly, where the purchaser or “consumer” is an entity with a yearly turnover exceeding R2 million, the CPA shall have no application. Entities of this nature are acknowledged to have the resources to adequately protect their interests. Even in cases where a “voetstoots” clause seems to be validly included in a sales agreement, it does not wholly indemnify the seller. In certain instances, the purchaser may possibly be permitted to some sort of relief if a defect is later revealed. Relief might encompass a price reduction or the cancellation of the purchase contract. The CPA includes ‘an implied warranty of quality’ from the seller, in any business deal that falls within its ambit. Accordingly, the seller will be presumed to be transferring property free from any defects. The only means of safeguarding that the presumption does not apply is to explicitly disclose all defects or potential defects, to which the purchaser must expressly agree to.

Put differently, the purchaser must be placed in a position whereby they may make an honest assessment in negotiating the purchase price or whether to purchase at all. It is consequently imperative that the purchaser of any property seek the necessary legal advice when coming across clauses of this nature in the process of concluding purchase agreements or sellers in seeking to include such terms. Obtaining legal advice in this regard is relevant in regulating needless financial risk.

The Consumer Protection Act places second-hand salespersons in the undesirable position of facing a possible ‘come back’ within 6 months after the goods are sold. For the consumer, the Act now offers security against the purchase of defective goods. A specific, once-off sale will not be affected by the CPA. What the CPA has achieved is make the voetstoots clause almost inadequate. In order for the voetstoots clause to work for the salesman, he will have to list all of the defects of the car. The buyer would then have to sign and acknowledge the presence of these defects. If any defects other than those listed and accepted are discovered within 6 months of the date of sale, then the consumer will have the right to insist on repair, replacement or refund.