Legal SA: The CPA: Non-Refundable Deposits & Cancellation Fees (Part 7)

This is the 7th insert of 8 dealing with the captioned matter – a topic that is regularly entertained by the CPA Commissioner of late

CPA PROVISIONS RE NON-REFUNDABLE DEPOSITS & CANCELLATION FEES – SECTION 48: UNFAIR TERMS & SECTION 49: NOTICE RE T&C

SECTION 48 UNFAIR, UNREASONABLE OR UNJUST CONTRACT TERMS

·                     This section not only addresses the contract terms but also the sales process (‘the manner’) and the waiver of rights and assuming of obligations – if we consider these in the broadest conservative terms, I believe it includes the issue under discussion

·                     As with section 41, this section contains a deeming provision [Section 48 (2) & read with regulation 45] & any of the aforesaid will be deemed to be ‘unfair, unreasonable or unjust’ IF it is ‘excessively one-sided, inequitable or the presentation is false or misleading’

·                     So, how does a supplier deal with it to ensure he/she does not fall foul of this section? Clearly the non-refundable deposit can be seen to be ‘one-sided’ but I don’t believe it is ‘excessively’ so as to be ‘inequitable’ provided it meets the norms prescribed in section 17 and are carefully explained and, as one travel agent does, the explanation is detailed in a separate sheet signed by the client    

SECTION 49 NOTICE REQUIRED FOR CERTAIN TERMS AND CONDITIONS

·                     WHAT: This section [Section 49 (1) & (2)*] requires certain aspects of the transactions to be brought to the specific attention of the consumer and such aspects include the following which I believe includes the topic under discussion:

(a) limit in any way the risk or liability of the supplier or any other person;

(b) constitute an assumption of risk or liability by the consumer;

* presence of which the consumer could not reasonably be expected to be aware

·                     HOW: It must be in writing, ‘conspicuous and  of such a nature that it will ‘attract the attention of an ordinarily alert consumer’

·                     WHEN: It must be drawn to the attention of the consumer at the earliest of when the contract is entered into or payment is made

·                     It is important to note that is can’t be done at the last minute (‘by the way’) or in a rush as must be done in such a way that the consumer [Section 49 (5)] has an ‘adequate opportunity in the circumstances to receive and comprehend the provision or notice’

‘WHAT TO DO’GUIDELINE

·                     Assess and amend where required the waiver and acceptance of obligations by the pax in your booking form & T&C objectively – look especially at clauses pertaining to e.g. airline provisions, passport, visas, health & liability

·                     Ensure that your cancellation, refund and non-refundable deposit clauses are brought to the attention of the pax at the earliest possible opportunity

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