Since the Consumer Protection Act 68 of 2008 (CPA) was introduced, there has been a special focus on voetstoots in private sale agreements and general provisions of a voetstoots contract.
It’s generally assumed that one would no longer be allowed to include a voetstoots clause in a contract when the ‘transaction’ falls within the jurisdiction of the CPA.
The CPA refers to a transaction as an agreement entered into as part of the usual course of business between a supplier and a consumer.
For example, a real estate agency which sells a property may not include a voetstoots clause in its sale agreement.
However, should a private person sell a property to another private individual, a voetstoots clause may in fact be included in the sale agreement because the sale is not part of the seller’s usual course of business.
According to section 48 of the CPA, a voetstoots contract or clause is considered unreasonable, unjust and unfair.
Therefore, contracts which fall within the scope of the CPA are not allowed to include such a clause and selling goods under an umbrella voetstoots clause is considered a breach of consumer rights.
An important note to make is that the CPA does not prevent any supplier from selling goods that are defective, however, such defects must be made known to the purchaser before the sale is finalised.
Common law applies to the private sale of property in South Africa due to the fact that such a sale does not form part of the seller’s (or buyer’s) usual course of business.
The seller of a property has an obvious advantage when including voetstoots in private sale agreements as this ultimately states that the property is sold as is.
This means that once the sale agreement has been signed, the seller no longer takes the responsibility of any house defects after purchase.
However, according to common law, a voetstoots contract does not exempt the seller from liabilities related to latent defects of a property should it be found that the seller was aware of the defects before the sale was finalised.
Therefore, including a provision in a private sale agreement which allows the purchaser (or a professional elected by the purchaser) to inspect the property will allow the purchaser the opportunity to withdraw their offer or re-negotiate the conditions of the sale.
Alternatively, the purchaser may request that the seller of the property guarantees that he or she is unaware of any potential latent defects in the property at the time of the sale.
In such an instance, the voetstoots clause will be considered invalid.
Because the selling of property is within the scope of an estate agency’s usual course of business, any person buying property through an agency will be protected by the CPA.
For legal assistance related to voetstoots in private sale agreements and other property related matters, contact our attorneys in Johannesburg and Cape Town today.
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