Signing a contract is governed by the general principle - 'caveat subscriptor' - let the signer beware! This means that you are bound to honour what you sign.
However the government, in support of consumer rights, now allows you to cancel a fixed term contract early, provided you pay a cancellation penalty.
There are therefore ways to get out of a contract and if you are thinking of doing this, you need to know what your rights and obligations or consequences may be, before you attempt this on your own.
Mc Naught and Co. can advise of the Acts and regulations, procedures and pitfalls of breaking a contract.
COOLING OFF PERIODS
1. Certain contracts are allowed a 'cooling off period' after signing, during which you can cancel the deal without penalty.
Acts involved are the Consumer Protection Act, the Alienation of Land Act and the National Credit Act which allow contracts to be cancelled. These include franchise agreements (within 10 days) in terms of the Consumer Protection Act Regulations, property purchase agreements up to the regulated limit purchase price - presently R250 000 (within 5 days) in terms of the Alienation of Land Act, and leases and instalment sales in terms of the National Credit Act (within 5 days) for goods bought under an NCA agreement eg motor vehicle financed.
Cooling off periods (read more)
FIXED TERM and OTHER CONTRACTS
2. Some contracts fall under the Consumer Protection Act and some don't. The exclusions are contracts signed not in the ordinary course of business of the supplier, as well as contracts between bigger corporate entities. A monetary limit is set from time to time to define these entities and is presently set at an annual turnover exceeding R2mil. In other words if the annual turnover of the business is R2mil a supply to that business does not give them the protection of the Consumer Protection Act and the rights of termination set out in the Act.
For those that do fall under the Act, there are procedures and penalties for termination of fixed term agreements, monthly agreements, return of defective goods and certain implied warranties applicable.
Check out this handy table :
For more information and an assessment of the contract you or a customer of yours may have signed and whether a cancellation would be legal and whether penalties may apply, book a consultation with the experts and ensure that the law is understood in your case.
Phone: 0870210123
https://maclaw.co.za/contact-us/
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