Are voetstoots clauses still valid and enforceable?
A voetstoots clause stipulates that a seller shall not be held liable for diseases or defects and that a good is sold “as it stands” or “with all its faults.” When a good is purchased voetstoots, it is purchased as it stands, whether or not it has patent or latent defects. A latent defect is a fault that would not readily be revealed by a reasonable inspection (roof leaks, broken underground drains, leaking geysers) whereas patent defects are defects that are not hidden and should easily be discovered by a reasonable inspection (broken door or damaged tiles).
A voetstoots clause essentially means that what you see is what you get. Prior to the commencement of the Consumer Protection Act (“the CPA”), these clauses were found in most property and second-hand vehicle sale agreements.
The CPA came into effect in 2011 and has placed much doubt on the validity and enforceability of voetstoots clauses. The CPA promotes a fair, accessible and sustainable marketplace for consumer products and services, including the buying or selling of immovable property, and provides for a statutory duty of disclosure. The CPA has furnished consumers new rights regarding the quality and usability of goods purchased and has ensured that suppliers do not deprive consumers of these rights.
There are many provisions in the CPA which have contributed to the near demise of the voetstoots clause. These provisions are highlighted below:
- S2(10) provides that no provision of the CPA may be interpreted so as to preclude a right that a consumer would have in terms of the common law;
- S(4)(4)(b) provides that if a contract, standard form or document contains a restriction, limitation, exclusion or deprivation of a consumer’s rights, then such a contract, standard form or document must be interpreted to the benefit of the consumer so that any restriction, limitation, exclusion or deprivation of a consumer’s legal rights should be limited to the extent that a reasonable person would ordinarily contemplate or expect;
- S48(1)(c) states that a supplier must not request a consumer to waive any of his rights, or waive the liability of a supplier, or assume any obligations on terms that are unfair, unreasonable or unjust. Voetstoots clauses are considered to be “unfair, unreasonable and unjust” and it can be argued that selling goods in terms of a general ‘umbrella’ voetstoots clause is a clear waiver and deprivation of a consumer’s right;
- S51(1)(b)(i) states that a supplier must not make a transaction or agreement subject to any term or condition if it directly or indirectly purports to waive or deprive a consumer of a right in terms of the CPA;
- S55(2) states that consumers have the right to safe, good quality goods, particularly that goods must be reasonably suitable for the purpose for which they are generally intended or suitable for any specific purpose which was communicated to the supplier; be of a good quality, in good working order and free of defects; be useable and durable for a reasonable period of time; and comply with any other legislation which regulates their quality;
- S55(3) provides that the consumer has a right to expect that the goods are reasonably suitable for the specific purpose that the consumer has informed the supplier of. If the defect manifests within 6 months of the delivery of the goods, the complainant is entitled to return them, at the supplier’s risk and expense, and to demand without penalty, a refund, replacement or repair; and
- S56(4) provides that the implied warranty of quality is in addition to any other warranty in terms of the common law.
Although consumers are sufficiently protected in terms of the above provisions, they must be wary and informed of the following:
- S55(6) provides that a supplier will not be liable in terms of Section 55(2)(a) and (b) if the consumer has been expressly informed that certain goods were offered in a specific condition and has expressly agreed to accept the goods in that condition, or knowingly acted in a manner consistent with accepting the goods in that condition. A supplier may therefore avoid liability for defects that were brought to the attention of the consumer and that were accepted by him;
- The CPA only affects agreements concluded in the ordinary course of business, which means that the voetstoots clause cannot be included in sale agreements where the seller is acting within the course and scope of its ordinary business. A seller (e.g. a property developer) cannot rely on the protection of the voetstoots clause if it enters into an agreement of sale with a consumer that is protected by the CPA. On the other hand, sale agreements between private individuals, that is not within their ordinary course of their business, may include voetstoots provisions in the agreements; and
- In terms of s5(2), the CPA will not apply to a transaction, if a purchaser is a juristic person with an asset value or annual turnover exceeding R2,000,000 (two million rand). An agreement of sale between a seller and a purchaser, whose annual turnover exceeds R2,000,000 (two million rand), may include a voetstoots clause as such transaction does not receive protection under the CPA.