Since it is something that I have been dealing with a lot at work recently, I thought that I would write up a quick blog on the Consumer Protection Act and how it affects us as both customers and suppliers.
For those of you who don't know what the CPA is, it is a new act that came into effect earlier this year governing the way the small businesses are run and protecting the consumer from businesses that may be trying to swindle them. I am not sure how laws look in the States or other countries, so I wouldn't know what laws are in place there to protect the consumers when dealing with small businesses, but this was a fairly new thing in South African law. The ethics behind the law had essentially been in place prior to it being passed, but the Act sets everything in stone and sets a guideline for legal action against companies that do not comply with it. Oh, and I am sorry if my legal jargon is a little off. I did not study law, but I have studied the Act itself and have tried to make the best sense that I can out of it.
The reason why I have had to study the Act so hard is because my company, as it is considered to be a small company (as opposed to, you know, Telkom and such companies), needs to rewrite all of our contracts to comply with the new Act. What does this mean for us? All waivers of liability go out the window, all force majeure and disclaimers go poof. Our contracts have to be rewritten entirely to ensure that none of the clauses go against the CPA, because if even one does, our entire contract goes up in flame and cannot be binding.
What this means for the customer is that the buying power is in their hands. It means that they cannot be taken for a ride by a supplier who sees someone who knows nothing about a product and therefore tries to fob it off for a ridiculous price. It means that buying and selling of products needs to be fair, open and honest, and if a customer finds that their service is not fair, they can complain and there is now an avenue to go through for the complaint that will lead to an outcome rather than getting stuck in court for years on end.
I think that the new Consumer Protection Act can be a great thing for the consumer. I also think that it can be a horrifying thing for the supplier. While the Act protects consumer's rights, it also takes away a number of the rights of the Supplier. It makes them liable for problems that they may not have been liable for before and that larger companies are not liable for.
Let's use an example. Let's say that the company I'm working for has a problem with the Telkom line at their servers. This would lead to a number of problems with the servers and may lead to a large number of clients not being able to access their services. Previously, our contracts would have protected us, as they included a clause holding us unaccountable for loss of data that was caused by a problem beyond our control. We can no longer say that. We now need to be held accountable for loss of data or loss of business caused by that problem with our servers. You would think that we would then be able to hold Telkom accountable, but they are a big company unaffected by the CPA and we can't. This means that we would be losing a large amount of money and there would be nothing that we could do about it.
Now, I may be completely wrong about all of this. As I said, I have only read the CPA and have been trying to adjust our contracts to comply with it, but I know that it has its pros and cons. It has its pros for the consumers who need this kind of set procedure for dealing with problems. But it also has its cons for small businesses that are not trying to swindle, not trying to be unfair, closed off or dishonest, but are merely trying to keep afloat.
I suppose I will just have to keep reading the CPA and keep writing the contracts until something changes and hope that we never have to be on the receiving end of a CPA lawsuit.
No comments:
Post a Comment