1 October 2009

Right to fair, just and reasonable conditions

The Act affords all consumers the right to terms and conditions in agreements that are fair, just and reasonable.

In giving effect to this right, the Act prohibits suppliers from supplying goods or services at a price that is unfair, unreasonable, or unjust; or from entering into an agreement whose terms are unfair, unreasonable, or unjust. Terms and conditions are unfair, unreasonable, or unjust if such terms and conditions are so skewed to the detriment of the consumer, and in favour of the supplier, that they can be said to be inequitable, or if the consumer relied on a false or misleading representation made by the supplier in concluding the relevant agreement.

The Act also requires that where an agreement has a clause that: a) limits liability of the supplier; b) imposes an obligation or risk on the consumer; c) imposes liability on the consumer; d) indemnifies the supplier or any third party for any cause; or e) purports to be an acknowledgement of any fact by the consumer, then such a clause should be pointed out or brought to the attention of the consumer in plain and understandable language and in a conspicuous manner. Failure to do so would render the agreement unjust, unfair and unreasonable.

In addition, where a provision is subject to an unusual risk, one that could result in death or injury, or one which the consumer would reasonably and ordinarily not have been aware of or notice, this must be brought to the consumer's attention in plain and understandable language, and the consumer must specifically assent to that risk. Such a provision would be considered to have been brought to the attention of the consumer if the consumer has demonstrated that he is aware of, and accepts the provision in question. Awareness of, and acceptance by, the consumer could presumably be demonstrated by the consumer initialling next to that provision. These risk-bearing provisions have to be brought to the attention of the consumer before the relevant transaction is concluded. In addition, the consumer must be afforded sufficient time to understand the relevant risk.

Jay-Ann Jacobs,
Director, Corporate and Commercial

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