Understanding the New Consumer Protection Act

The new Consumer Protection Act which has now come into force ushers in several far reaching and significant protections for consumers. The Act defines a consumer widely, being, a consumer means “any person … to whom or to which any commodity is offered, supplied or made available, where such person does not intend to apply the commodity for the purposes of resale, lease, rendering services or the manufacture of goods for gains”. A “commodity” means any property whether corporeal or incorporeal and whether “fixed removable”.

The Act now expressly provides consumers with a right to receive goods which are of a good quality, in good working order and free of defects unless the opposite is clearly disclosed or the supplier informs a consumer that particular goods are offered in a different specific condition and the consumer consents to taking the goods in that condition. A supplier is further prohibited from supplying goods that do not confirm to the mandatory safety standards as set by the Botswana Bureau of Standards, or other international standards recognised by the Bureau.

. Should a supplier fail to provide goods in accordance with the quality requirements set out above, it risks having to refund the purchase price or having to replace the sold goods. The rights of the consumer in this regard endure for six months following the date of delivery of the goods. A supplier is further made liable for any damage caused by supplying unsafe goods or for any product failure, defect or hazard in such goods where the supplier had prior knowledge of the potential damage, product failure, defect or hazard.

Perhaps the most important change brought in by the Act is its detailed regulation of the terms and conditions in a consumer contract. The requirements of the Act in this respect are far reaching and if not complied with, will render consumer contracts void and unenforceable as against the consumer. Not only are unfair, reasonable, or unjust terms prohibited under the Act, but it also requires consumer contracts to now contain certain prescribed information and terms relating to the goods, price and other incidental supply matters. As to what is an unfair, unreasonable or unjust term under the Act is extremely wide and includes terms that exclude or limit the liability of the supplier, terms that require the consumer to waive any right and terms that are positioned in such a manner as not to be obvious to a consumer.

. It is also not only the content of consumer contracts that is now regulated. The Act also prescribes the manner in which consumer contracts are to be negotiated and concluded, including requiring a sup-plier to explain the terms of the contract to a consumer prior to execution and having the consumer consent to each material term by initiating next to each such term and issuing a written contract to the consumer.

In addition to a consumer contract being rendered invalid where it does not comply with contract requirements of the Act, a consumer is also now given a cancellation right whereby the contract can be cancelled upon 14 days’ notice provided that the goods supplied are still in merchantable quality. As to what “merchantable quality” means, is unclear from the Act as it sets out no criteria for determining such quality. This clearly will lead to uncertainty and disputes over the right to cancel or return the goods.

. Finally, it is pointed out that advertising and marketing by suppliers to consumers is also heavily regulated under the Act, including the regulating of marketing that speaks to the quality of the product, the performance of the product and the delivery times which a supplier claims the products will be delivered within. Suppliers should also be aware that generally unfair or unreasonable marketing is prohibited, and the Act now expressly regulates “bait advertising”.

The Act poses a significant future risk to suppliers should they fail to ensure that their contracts and business activities conform to the requirements of the Act. Not only do they face the prospect of not being able to enforce their contract as against consumers (which will be a problem where the consumer defaults on making payment) thereunder but they now also face very high fines or being charged with a criminal offense under the Act. There is also the further prospect of contract busting, being a practice whereby third party consumer consultants or lawyers acting for a fee, “bust” non- compliant consumer contracts for the sole purpose of assisting consumers to avoid their contractual obligations thereunder. This could result in a significant number of consumer contracts being challenged and being set aside by consumers.

To avoid the significant risks posed by the Act, it is recommended the suppliers have an attorney vet their contracts and business processes to ensure that they are complaint with the Act.

Understanding the New Consumer Protection Act

Mark McKee

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