Question

Business Law

a) With reference to case law, discuss in detail the remedy of prohibitory interdicts in the instance of breach of contract.

b) In terms of the Consumer Protection Act 68 of 2008 a consumer has a right to “fair and responsible marketing’, which rests on a general prohibition against marketing that is false, misleading or fraudulent. Discuss this right in detail.

Answer 1

Answer:

In the event of breach of contract, the remedies available at one’s disposal include:

• “Specific performance: used as means of enforcing the terms of the contract
• Interdict: used as means of enforcing the terms of the contract
• Cancellation: used as means of seeking compensation for the non-performance and non-compliance
• Damages: used as means of seeking compensation for the non-performance and non-compliance”

The remedy of prohibitory interdicts is a suitable remedy to prevent the breach or the threatened breach of contract. Wherein, an interdict (prohibition or ban or moratorium) is imposed by the court onto the defendant. The defendant is bound by prohibitory specifications in the order. In the likelihood of the defendant failing to comply with these prohibitory specifications in the order, they can be charged with “contempt of court” and subsequent penalties resulting from this contempt.

b) In terms of the Consumer Protection Act 68 of 2008 a consumer has a right to “fair and responsible marketing’, which rests on a general prohibition against marketing that is false, misleading or fraudulent. Discuss this right in detail.

Answer:

The Consumer Protection Act 68 of 2008 focusses on protecting the consumer by "promoting a fair, accessible and sustainable marketplace for consumer products and services and, for that purpose, establishing national norms and standards relating to consumer protection, by providing for improved standards of consumer information, to prohibit certain unfair marketing and business practices, to promote responsible consumer behaviour ".

As part of the Consumer Protection Act 68 of 2008, the rights of the consumers include:

• Equality in the consumer market
• Privacy
• Consumer’s choice
• Disclosure and information
• Fair and responsible marketing
• Fair and honest dealing
• Fair, just and reasonable terms and conditions
• Fair value, good quality and safety

The Act prohibits marketing that is false, misleading or fraudulent or discriminatory (exclusion of/inclusion of/targeting specific communities for supply of goods and services). It promotes fair and responsible marketing and protects the interests of the consumers against unfair or restrictive trade practices. Misleading marketing practices include false or misleading representations, fraudulent schemes and offers, pyramid schemes and offers in bait marketing (enamoring a customer to visit a supplier), direct marketing( soliciting a customer in person in order to sell goods or services or request for donation/ charity services), negative option marketing( the consumer is falsely deemed to have initiated a purchase transaction), catalogue marketing( not providing the opportunity to the customer to inspect the goods in person), promotional activities or promotional competitions such as trade coupons and so on, customer loyalty programs, alternative work schemes and referral selling.

According to the Consumer Protection Act 68 of 2008, marketing must not misrepresent that:

• “You act on behalf of a supplier
• Goods or services have characteristics that they do not have( false claims)
• Goods or services are of a particular standard, quality, grade, style or model, if they are not
• Goods are new or unused, if they are not, or if there is a change
• Goods or services are available or can be delivered or performed within a specified time”

A significant feature of the Consumer Protection Act 68 of 2008is “the provision for compensation and the support it provides to the customers for redressal of grievances.”