Control of Price Related Terms in Standard Form Contracts in South Africa

Many South African consumers are vulnerable to exploitation through the abuse of non-negotiable and non-transparent price-related standard terms. The common law of contract provides only limited relief in these circumstances. Some potential exists for developing common-law principles, such as those relating to when terms or their enforcement are contrary to public policy, in order to provide greater protection against unfair price-related terms. But the prospects for such a development are not promising, even though the South African Constitution allows courts to develop the common law to give effect to a horizontally-applicable Bill of Rights. By and large, the courts adopt a fairly conservative approach, which generally emphasises sanctity of contract.

However, the legislature has been quite active in creating regulatory standards, systems and structures that deal with the control of price-related terms. Notable examples include a general provision in the Consumer Protection Act 68 of 2008, which determines that the price or terms of a consumer contract must not be unfair, and other provisions which prohibit certain terms or misleading practices, or which presume certain terms to be unfair. Unfortunately, the enforcement of consumer legislation by statutory bodies has not been particularly strong.

Apart from these general provisions, consumers may also obtain relief against abuse of price-related terms through relying on rules that regulate specific industries. Thus, some success has been achieved in regulating the costs of credit and there are also strong signs of increased intervention in the problematic area of the high costs of electronic communication. Competition law has also proved to be effective in combatting some exploitative practices. Ultimately, the South African experiences indicate that rules aimed against the abuse of price-related standard terms must be backed up by effective enforcement mechanisms, especially where individual consumers lack the ability to enforce their rights.