Monthly Archives: October 2013

The Consumer’s Rights Under The Consumer Protection Act

BlogPicGridFrom April 2011 the Consumer Protection Act came into full effect with the result that it is now against the law to use difficult-to-understand language in any business document or contract.Business usually comes with some kind of paperwork, whether it’s a contract, a letter of agreement or even an instruction booklet.

These vital documents are often written in language that is hard to understand for the average consumer, which is why there are specific Plain Language regulations in The Consumer Protection Act to prevent consumers signing documents they do not understand.

Protecting the consumer

The Act’s express purpose is to make sure consumers are not treated unfairly – intentionally or not. This means that using plain language is more crucial than ever. From now on, using obscure and confusing wording, especially in binding contracts, is not allowed. Quite simply, it’s illegal!

Too many consumers have landed in big trouble, especially financial trouble, because they haven’t understood what they’ve signed. Sometimes contracts are written in bloated, bureaucratic jargon just because that’s the way it has always been, or because the people writing the contracts don’t know any other way to do it.

Often, though, unscrupulous businesses have used complicated language on purpose, as a way to trick consumers into paying for something they can’t afford, to sign away their rights, or to agree to unfair terms and conditions.

Defining plain language

The Consumer Protection Act defines plain language in Part D, Section 22 as follows:

“For the purposes of this Act, a notice, document or visual representation is in plain language if it is reasonable to conclude that an ordinary consumer of the class of persons for whom the notice, document or visual representation is intended, with average literacy skills and minimal experience as a consumer of the relevant goods or services, could be expected to understand the content, significance, and import of the document without undue effort, having regard to:

  • The context, comprehensiveness and consistency of the notice, document or visual representation;
  • The organisation, form and style of the notice, document or visual representation;
  • The vocabulary, usage and sentence structure of the notice, document or visual representation; and
  • The use of any illustrations, examples, headings, or other aids to reading and understanding.”

This means that one won’t be permitted to word things so widely that they can be understood in several ways. The Act states that if there is any doubt about the meaning of certain words or terms and conditions, the benefit will go to the consumer.

Even advertising and marketing may no longer contain any ambiguity. Advertisements won’t be allowed to exaggerate and they will have to be easy to understand, fair and honest. The Act states that service providers will have to spell out everything in words that consumers can understand, alternatively the consumers have the right to full disclosure and information in plain and understandable language.

So, don’t delay. If you have a business document or contract that has been used for generations you might have to take a second look at it to edit or reword it so that it complies with the Consumer Protection Act.

This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice.

Welcome to the all brand new Delport van den Berg!

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New Offices

Delport Van den Berg are very pleased to inform our clients and friends that we recently moved to our splendid new offices in an ultra-modern office building just off the N1 in Pretoria. We are now located in Building 2 of Summit Place Office Park in Menlyn, Pretoria. The street address is 221 Garsfontein Road although, due to construction work in the area, the entrance at 220 Thys street must temporarily be used.

We want to share the excitement of our new home with you and look forward to meeting you here, whether it be for business or just for a look around, a chat, and a cup of coffee or tea should you happen to find yourself in our vicinity. Street map directions for those who are not familiar with the area can be found by clicking here.

Do pay us a visit!

New Website

We are also very pleased to announce the launch of our newly redesigned website.

We hope you will visit the new website at our same address, www.delportvandenberg.co.za. and acquaint yourself with the new site. And while you’re there, let us know what you think.

We hope that you will enjoy browsing our new site, finding more options and information each time, and that it will be yet another tool for strengthening our business relations.

We embrace the vision that an attorney is also a businessman and offer practical, authoritative and commercially astute advice to promote the growth of our clients’ businesses.

New Newsletter

Our new monthly electronic newsletter is sent to you automatically. You became a “subscriber” because your details were recorded on our electronic database following previous contact of some form or another with you. The newsletter will also be on the website under latest news for your convenience.

The purpose of issuing the newsletter is to keep our clients and friends informed with information that is meaningful and that we consider might be relevant to their interests. Thus, the newsletter is designed to contain

  • interesting legal articles and court cases that affect all of us
  • noteworthy and useful legal tips
  • information on the latest legislation relevant to business and the general public
  • news about our firm and its activities

We sincerely hope that you find reading our newsletter worth your while and that you wish to continue receiving it regularly. You are welcome to provide us with comments on the content or with any other feedback that you feel could help to improve and make the newsletter an even better reading experience.

Receiving the newsletter is, of course, optional and should you prefer that we no longer send it to you, you may simply click on the Opt Out link below to remove your name from the mailing list.

Business planning

B2A Partnership automatically dissolves upon the death of a partner and the remaining partners will then have to dissolve it and divide the assets amongst them.

In the case of a Company the shareholders may agree that:

  • The remaining shareholders have a right of first refusal to purchase the deceased shareholder’s shareholding, as opposed to dealing with it in a will.
  • The future of ownership of shares can be regulated by a written agreement between shareholders that is referred to as “buy and sell” agreement and has an influence at the death of a partner or shareholder.
  • The buy and sell agreement compels the executor of the deceased to offer the shares at a pre-determined price, and life policies between shareholders normally cover the purchase price.
  • The remaining shareholders are the beneficiaries of the policy on the life of the deceased and use it to purchase the shares, normally pro rata to the shares they already own.
  • Buy and sell policies fall outside the deceased estate and are not subject to estate duty provided that three requirements are met:
    • None of the premiums should have been paid by the deceased;
    • The shareholder relationship must have existed at the time of death;
    • A written agreement must exist.
  • When the skill and knowledge of a partner is essential for the survival of the business, “key man insurance“ can be taken out on the life of such a partner or shareholder. The premiums are paid by the business and the benefit is paid to the business to prevent financial loss or to appoint and train a replacement.

In the case of a “sole proprietor”, succession planning is dealt with in the Last Will and Testament.

  • All the value of the business vests in the deceased estate.
  • Planning is essential as the business terminates at death, although the executor may sell it as a going concern.
  • It is a good idea to grant a right of first refusal to an associate, who can purchase the business and intellectual capital at the time of the death.
  • A life policy can provide for cover on the life of the owner, with the associate being the beneficiary, and the proceeds at time of the death utilized to purchase the business.
  • It deserves no debate that planning increases the benefit for the estate as opposed to closing the business down, where the assets will be worth far less.

Continued succession planning must be part of your business strategy to ensure your hard work benefits the right people.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.