Cancellation of a contract – cooling off period? and other rights
Many buyers are under the mistaken impression that they have a “cooling off period” and can cancel any purchase or services contract entered into within 5 or 7 days. In terms of the Consumer Protection Act (Section 16 (3)) a cooling off period of 5 days applies to transactions concluded through “direct marketing”.
This is defined as..
“direct marketing means to approach a person, either in person or by mail or electronic communication, for the direct or indirect purpose of—
(a) promoting or offering to supply, in the ordinary course of business, any goods or services to the person; or
(b) requesting the person to make a donation of any kind for any reason;”
Responding to a public advert by a supplier does not constitute direct marketing. So if you see an advert for something and respond to it and buy goods or sign a contract for services this is not “direct marketing” and you do not have a cooling off period to cancel the sale or contract. If the cooling off period is applicable, you may cancel for any reason and without penalty.
Electronic Transactions and Communications Act
Similarly, the Electronic Transactions and Communications Act (Section 44 (1)), a consumer may cancel a transaction concluded by electronic means eg phone call or website, within 7 days without penalty and for any reason. So the next time a security company or insurance agent phones you and talks you into a contract over the phone, you do have a cooling off period and provided you follow the correct procedure to cancel the transaction.
Cancellation process
Cancellation must be by notice in writing to the supplier within the time period either from the date the transaction was concluded or, if for the purchase of goods, from the date of delivery of the goods, whichever is the later. The only cost that may be levied to the consumer is the cost of returning any goods delivered. Other than that, a full refund needs to be made of payments made by the consumer.
No cooling off period
If there is no cooling off period as the transaction was not concluded through direct marketing or electronic communication, then you may still cancel a contract, but then this is subject to a reasonable penalty fee. Section 14 deals with fixed period contracts eg leases, and Section 17 deals with advance bookings, reservations or orders for goods or services to be supplied. 20 days written notice of intended cancellation is required for fixed term contracts, and no advance notice is required for the others. This does not apply to franchise agreements or special-order contracts. Section 14 (3) deals with “reasonable penalty fees” for fixed terms contracts and…
Section 17 of the Consumer Protection Act deals with the cancellation consequences for advance bookings, reservations and orders.
In these cases a “reasonable charge” (Section 17 (3)) may be imposed. A charge would be unreasonable (Section 17 (4))..
“if it exceeds a fair amount in the circumstances, having regard to—
(a) the nature of the goods or services that were reserved or booked;
(b) the length of notice of cancellation provided by the consumer;
(c) the reasonable potential for the service provider, acting diligently, to find alternative consumer between the time of receiving the cancellation notice and the time of the cancelled reservation; and
(d) the general practice of the relevant industry.
(5) A supplier may not impose any cancellation fee in respect of a booking, reservation or order if the consumer is unable to honour the booking, reservation or order because of the death or hospitalisation of the person for whom, or for whose benefit the booking, reservation or order was made.”
The Act applies to suppliers both within the Republic of South Africa, or outside (Section 5 (8))..
“(8) The application of this Act in terms of subsections (1) to (7) extends to a matter irrespective of whether the supplier—
(a) resides or has its principal office within or outside the Republic;”
Defective goods
The scope of this article does not include cancellations due to defective goods which is covered elsewhere on our page or cancellations by buyers who are companies or other juristic entities and is a guide, not definitive, and requires a complete reading of the relevant Acts and circumstances to determine your exact rights.
Complaints
If you have any complaints against a supplier, you can lodge a complaint with the National Consumer Commission here. This is their website for more information-
https://www.gov.za/about-government/contact-directory/soe/soe/national-consumer-commission-ncc
and where you can download a complaints form.
