What impact does the CPA have on the Voetstoots clause?

General Terms & Conditions

Voetstoots: the common law principle

When someone buys goods, South Africa’s common law provides an implied warranty that the goods are sold free from defects. But if goods are sold “voetstoots” it means that the goods are sold “as is” and without any warranty. If it later transpires that there were defects in the goods the purchaser wouldn’t have any recourse against the seller. Except where the defect existed at the time of sale and the seller knew about it, yet failed to disclose the defect to the buyer. A sale contract containing a voetstoots clause wouldn’t protect a seller who knew about a defect but failed to disclose it, knowing that the sale may have fallen through, or the purchaser would have negotiated a reduced price. When the purchaser eventually finds out about the defect, the purchaser would have recourse against the seller to cancel the sale and reclaim the purchase price, alternatively to keep the goods but claim a reduction in the price.

 

Consumer Protection Act

The Consumer Protection Act provides that goods must be sold in good working order, free of defects, and must be reasonably suitable for their intended purpose at the time of the sale.

The enactment of the CPA raises some interesting questions. Is the voetstoots clause impacted by the CPA? How legal is the voetstoots clause now? Can a seller sell goods that may contain defects? Is it legal for a someone to sell “seconds” or factory-damaged goods? How does the CPA impact on the sale of used goods? Second-hand items by their nature can have defects or be damaged. How does the CPA impact on the sale of things that by their nature carry risks or inherent defects, for example livestock, artwork or handcrafted goods?

The CPA doesn’t prohibit the sale of defective or damaged goods. But it does obligate the seller to disclose known defects and risks in the goods. And if the items are second-hand, factory-soiled, used or “seconds” the seller must inform the customer so that the customer can decide whether to accept the risks involved. The seller must also ensure that they disclose to the customer any material information about the goods before concluding the sale.

Sellers can reduce their risk by informing customers about the condition of the goods, or notifying the customer of the risks in the goods. For example:

  • these goods are hand-made, and the final products could contain variances;
  • this house was built over 50 years ago. It needs a lot of maintenance to restore it to its former glory;
  • this 20-year old car has high mileage. Parts can break unexpectedly;
  • these products have an expiry date, shelf-life or use-by date.

 

A seller should specify the condition of the items – preferably in writing – so that the purchaser can accept the risks. Ideally, risks or defects should be declared in a written Sale Agreement. The purchaser would therefore agree to accept the items, warts and all, and would be responsible for any costs and expenses that may crop up in the future. Of course, if there’re problems that the seller knew about but didn’t disclose, the buyer could still have a claim against the seller.

If the seller is selling brand-new, pre-manufactured goods, the seller is unlikely to succeed in shifting the burden of risk. In these sales the purchaser would generally have a claim for any defects in the items. If a defect comes to light within six months after the sale, and provided that the customer wasn’t aware of and didn’t accept the risk of the defect, the CPA gives the customer a right to return the goods for a refund, exchange or repair.

So the CPA doesn’t actually prohibit the voetstoots clause. There is still use for the voetstoots clause in Contracts of Sale for certain categories of goods and products. But the CPA restricts the voetstoots clause by placing an obligation of disclosure on the seller. Before the seller can declare the purchaser liable for any defects, the seller must ensure that full disclosure was made.

Please note that this information is supplied for general information and does not constitute legal advice. It is advisable for you to contact a legal practitioner for guidance in respect of your unique requirements.

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