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Tuesday, 02 February 2010 12:30

Costly protection

{pp}The Consumer Protection Act of 2009 comes into effect in October this year, 18 months after promulgation, with far-reaching consequences for manufacturers and suppliers of consumer goods.

The Act purposefully defines “consumer”, “manufacturer”, “supplier”, and even “consumer industry” itself very widely. Manufacturers previously had no causal connection, and therefore liability, towards consumers, but are now loudly and clearly in the supply chain and answerable to consumers where defective or substandard products have caused loss.

Other notable provisions include the strict liability provision by which neither supplier nor manufacturer may contract out of gross negligence. Even routine exemptions from liability are invalid unless the consumer signs acknowledgement that they have been drawn to his/her attention. Manufacturers and suppliers themselves, if they have an annual turnover in excess of a given amount, will not be classified as consumers and will not receive the protection that the Act affords to consumers.

Smaller businesses in particular may face difficulties taking measures to protect themselves from the strict liability imposed by the Act. While much will depend on the regulations yet to be published, there is no doubt that the Consumer Protection Act will impact on the cost of doing business, passing expense on to the very consumer whom the Act is meant to protect.

Contact Information:
Walkers Attorneys
Telephone: +27 21 464 1400
Fax: +27 21 462 2256

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