CAN­CEL­LA­TION, PENAL­TIES & NON-REFUNDABLE DE­POSITS

Tourism Tattler - - LEGAL - Dis­claimer: This ar­ti­cle is in­tended to pro­vide a brief over­view of le­gal mat­ters per­tain­ing to the travel and tourism in­dus­try and is not in­tended as le­gal ad­vice. © Adv Louis Nel, 'Louis The Lawyer', April 2016.

SEC­TION 48: UN­FAIR, UN­REA­SON­ABLE OR UN­JUST CON­TRACT TERMS

This sec­tion not only ad­dresses the con­tract terms but also the sales process (‘the man­ner') and the waiver of rights and as­sum­ing of obli­ga­tions – if we con­sider these in the broad­est con­ser­va­tive terms, I be­lieve it in­cludes the is­sue un­der dis­cus­sion.

As with sec­tion 41, this sec­tion con­tains a deem­ing pro­vi­sion [Sec­tion 48 (2) and read with reg­u­la­tion 45] and any of the afore­said will be deemed to be ‘un­fair, un­rea­son­able or un­just' if it is ‘ex­ces­sively one-sided, in­equitable or the pre­sen­ta­tion is false or mis­lead­ing'.

So, how does a sup­plier deal with it to en­sure he/she does not fall foul of this sec­tion? Clearly the non-refundable de­posit can be seen to be ‘one-sided' but I don't be be­lieve it is ‘ex­ces­sively' so as to be ‘in­equitable' pro­vided it meets the norms pre­scribed in sec­tion 17 and are care­fully ex­plained and, as one travel agent does, the ex­pla­na­tion is de­tailed in a sep­a­rate sheet signed by the client.

SEC­TION 49: NO­TICE RE­QUIRED FOR CER­TAIN TERMS AND CON­DI­TIONS

WHAT: This sec­tion [Sec­tion 49 (1) & (2)*] re­quires cer­tain as­pects of the trans­ac­tions to be brought to the spe­cific at­ten­tion of the con­sumer and such as­pects in­clude the fol­low­ing, which I be­lieve in­cludes the topic un­der dis­cus­sion:

(a) limit in any way the risk or li­a­bil­ity of the sup­plier or any other per­son;

(b) con­sti­tute an as­sump­tion of risk or li­a­bil­ity by the con­sumer. * pres­ence of which the con­sumer could not rea­son­ably be ex­pected to be aware.

HOW: It must be in writ­ing, ‘con­spic­u­ous' and of such a na­ture that it will ‘at­tract the at­ten­tion of an or­di­nar­ily alert con­sumer'. WHEN: It must be drawn to the at­ten­tion of the con­sumer at the ear­li­est of when the con­tract is en­tered into or pay­ment is made. It is im­por­tant to note that is can't be done at the last minute (‘by the way') or in a rush as must be done in such a way that the con­sumer [per Sec­tion 49 (5)] has an ‘ad­e­quate op­por­tu­nity in the cir­cum­stances to re­ceive and com­pre­hend the pro­vi­sion or no­tice'.

THE CON­SE­QUENCES OF NON-COM­PLI­ANCE/BREACH­ING PRO­VI­SIONS ‘A’ SEC­TION 51: PRO­HIB­ITED TRANS­AC­TIONS, AGREE­MENTS, TERMS OR CON­DI­TIONS

Any trans­gres­sion of any of the above will re­sult in such ac­tiv­ity be­ing void and thus un­en­force­able [Sec­tion 51 (3)] - it could mean the sec­tion/clause or the en­tire agree­ment!

‘B’ SEC­TION 52: POW­ERS OF COURT TO EN­SURE FAIR AND JUST CON­DUCT, TERMS AND CON­DI­TIONS

This sec­tion per­tains to a trans­gres­sion of sec­tions 40, 41 & 49. Fac­tors the court must con­sider:

• Did the con­sumer get fair value?

• The bal­ance of power. e.g. knowl­edge & lit­er­acy of con­sumer

such as first time trav­eler.

• Forsee­able cir­cum­stances.

• Con­duct of the par­ties.

• Use of plain lan­guage.

Sec­tion 52 (2)(h) – im­por­tant for T&C and record-keep­ing:

• Whether the con­sumer knew or ought rea­son­ably to have known of the ex­is­tence and ex­tent of any par­tic­u­lar pro­vi­sion of the agree­ment that is al­leged to have been un­fair, un­rea­son­able or un­just, hav­ing re­gard to any:

(i) cus­tom of trade; and

(ii) any pre­vi­ous deal­ings be­tween the par­ties.

• Steps the court may take:

(i) Court de­ter­mines trans­ac­tion or agree­ment was, in whole or in part, un­con­scionable, un­just, un­rea­son­able or un­fair (i.e. sec­tions 40 & 48) – or­der sup­plier to:

(i) Re­store money or prop­erty to the con­sumer;

(ii) Com­pen­sate the con­sumer for losses or ex­penses re­lat­ing to: (aa) the trans­ac­tion or agree­ment; or

(bb) the pro­ceed­ings of the court;

(iii) Re­quire the sup­plier to cease any prac­tice, or al­ter any prac­tice, form or doc­u­ment, as re­quired to avoid a rep­e­ti­tion of the sup­plier's con­duct.

• Per­son al­leges that an agree­ment, a term or con­di­tion of an agree­ment, or a no­tice to which a trans­ac­tion or agree­ment is pur­port­edly sub­ject, is void in terms of this Act (Sec­tion 51) or failed to sat­isfy any ap­pli­ca­ble re­quire­ments set out in sec­tion 49; • If void: sever part of the agree­ment, pro­vi­sion or no­tice; al­ter it; de­clare the en­tire agree­ment, pro­vi­sion or no­tice void retroac­tively; • If breach­ing sec­tion 49: sever the pro­vi­sion or no­tice from the agree­ment; de­clare it to have no force or ef­fect;

• IN AD­DI­TION to the above it can ‘make any or­der that is just and rea­son­able'.

‘C’SEC­TION 100: COM­PLI­ANCE NO­TICE & PENAL­TIES

• The con­sumer com­mis­sioner (‘CC') can is­sue a com­pli­ance no­tice i.e. re­quir­ing sup­plier to rec­tify trans­gres­sion;

• Fail­ing that the CC can im­pose penal­ties.

‘D’ SEC­TION 111:PENAL­TIES (if con­victed of of­fence) • Con­tra­ven­tion of sec­tion 107 (1) (Breach of con­fi­dence), to a fine or to im­pris­on­ment for a pe­riod not ex­ceed­ing 10 years, or to both a fine and im­pris­on­ment; or • in any other case, to a fine or to im­pris­on­ment for a pe­riod not ex­ceed­ing 12 months, or to both a fine and im­pris­on­ment.

‘E’ SEC­TION 112: AD­MIN­IS­TRA­TIVE FINES (Na­tional Con­sumer Tri­bunal)

An ad­min­is­tra­tive fine im­posed in terms of this Act may not ex­ceed the greater of 10 per cent of the re­spon­dent's an­nual turnover dur­ing the pre­ced­ing fi­nan­cial year or R1 000 000.

When de­ter­min­ing an ap­pro­pri­ate ad­min­is­tra­tive fine, the Tri­bunal must con­sider the fol­low­ing fac­tors:

• The na­ture, du­ra­tion, grav­ity and ex­tent of the con­tra­ven­tion;

• any loss or dam­age suf­fered as a re­sult of the con­tra­ven­tion;

• the be­haviour of the re­spon­dent;

• the mar­ket cir­cum­stances in which the con­tra­ven­tion took place;

• the level of profit de­rived from the con­tra­ven­tion;

• the de­gree to which the re­spon­dent has co-op­er­ated with the Com­mis­sion and the Tri­bunal; and • whether the re­spon­dent has pre­vi­ously been found in con­tra­ven­tion of this Act.

NOTE: The Risk in Tourism series (The Law: Con­tracts) will con­tinue with Part 18 in the May 2016 edi­tion.

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