Photo by Kelly Sikkema on Unsplash
As you are aware from the series of articles on T&C I published last year, the issue of the application of the T&C to all interaction between the supplier and the client is an aspect that needs to be specifically addressed, i.e. enquiries, estimates, quotes & bookings.
The above is all good & well but how is this done or should it be done? The answer to the 1st question is that in most cases the T&C are simply referred to at the bottom of the e-mail, estimate, quote etc e.g. ‘T&C apply’ or ‘All business is subject to our T&C’. The answer to the 2nd question is that at least the more onerous clauses need to be highlighted/drawn to the attention of the client – this is not a ‘nice to have’ but a clear Consumer Protection Act (Act 68 of 2008: ‘the CPA’) requirement and, as far as personal information is concerned, a requirement of the Protection of Private Information Act (Act 4 of 2013:’the POPIA’).
How is the latter done? Ideally a one-on-one discussion with each client would be the answer but given that this is not feasible, an adequate documentary process is required. This is achieved by mentioning the T&C (& privacy policy for POPIA purposes) in each document that forms part of the ‘communication chain’ (what I call ‘the critical transactional path’) between the supplier and the client. On top of that bear in mind that a ‘mere mention’ is not enough the wording must imply tacit acceptance.
So what happened in this case (Van Wyk t/a Skydive Mossel Bay v UPS SCS South Africa (Pty) Ltd (5651/2014) [2019] ZAWCHC 166; [2020] 1 All SA 857 (WCC) (4 December 2019)? Skydive Mossel Bay (‘the Plaintiff’) needed one of the aircraft engines repaired. This had to be done in the USA so they engaged UPS SCS South Africa (Pty) Ltd (‘the Defendant’) to do the transport. The cause of the litigation was damage to the engine (which occurred in transit in the USA) amounting to R386 140, 30, insurance cover and documentary aspects relating thereto (‘the Paper Trail’).
The Paper Trail was initiated by an e-mail from the Defendant to the Plaintiff requiring it to complete a credit application (‘the Credit App’) attached thereto.
The Plaintiff advised the Defendant that there was no need to credit or for it to open an account/credit with the Defendant and that the Defendant’s fees (US$ 500) would be paid up front. However the Defendant advised the Plaintiff that there was a lot of ‘red tape’ and that they could not assist the Plaintiff if it did not have a ‘valid account number’ (This is not dissimilar to some outlets in South Africa that require you to have an account in order to do business with them).
Given the perfunctory nature of Credit App (‘it was a mere formality’), the Plaintiff professed that it had not read with T&C, only the 1st page and furthermore assumed that the Defendant would be arrange the required insurance (contrary to the T&C wording to that effect). The Plaintiff stated that:
And he had been under the impression that the Defendant wanted him to sign the forms just to capture his details, because he did not wish to have a long-term relationship with the Defendant and for that reason it was not important for him to read the terms and conditions.
A key issue is not only the insurance aspect, but that the T&C excluded or limited the Defendant’s liability. One the 1st page of the Credit App the following wording appeared, namely that all business is:
“subject to the Standard Trading Terms and Conditions and Terms and Conditions of Carriage printed overleaf.”
The liability limitations alluded to above read as follows:
‘unless it is proved that the loss, damage, non-delivery or miss delivery occurred whilst the goods was in the actual custody of the Defendant and under its actual control, based on clause 32 of PC 9.2. The engine was not in the Defendant’s actual custody or possession, or under its actual control, when it was damaged’
OR
‘unless it is proved that the damage was caused by the Defendant’s gross negligence. In this regard the Defendant relies on the provisions of clause 33 of PC 9.2. The Defendant alleges that it was not negligent, alternatively grossly negligent or that its negligence caused the damage to the engine’.
The Defendant argued that it did not have custody and control, alternatively that it had not been negligent.
The Plaintiff then argued that the relationship between the parties was governed by the CPA and more specifically the following aspects thereof (Sections are those in the CPA):
- His attention was not drawn to the implications of limitation of liability as required by section 49
- The T&C were not explained to him
- He asked the court to disregard the limitation of liability as provided for in section 52
- Nobody advised him that he should obtain his own insurance- he thought it was included in the freight charges
- The T&C was drawn to his attention but he would’ve preferred it if ‘someone had specifically indicated whichclauses were really important’
The Defendant countered and raised amongst others the following arguments:
- The Plaintiff is an experienced businessman & should have known the implications of the T&C
- Reference to the T&C was sufficiently conspicuous to attract the attention of ‘am ordinary alert consumer’
- The T&C were in plain language as required by the CPA
The court rejected that Defendant’s arguments, upheld those of the Plaintiff to the effect that the limitation of liability clauses did not apply, that the Defendant as should’ve arranged insurance and accordingly awarded damaged to the Plaintiff.
What are the lessons we can learn from this case? I believe the following;
- A ‘very casual’ reference to your T&C e.g. ‘T&C apply’ is not adequate
- The existence thereof must be drawn to the attention of the customer with a adequately worded reference and as early as possible – mention in the invoice (only) is much too late!
- As mentioned above the reference should be contained in ALL documents...
- It must include ‘read, accept & agree to be bound ’ wording
- Ideally the key clauses pertaining to especially obligations, undertakings, liability (accepting/waiver of) should be reflected in an ‘early’ document such as a quote/estimate, acceptance/confirmation of booking with acknowledgment via ‘tick boxes’ and/or ‘signing off’
GOOD LUCK!
© ADV LOUIS NEL
Louis-THE-lawyer
February 07 2021
DISCLAIMER - Each case depends on its own facts & merits - the above does not constitute advice - independent advice should be obtained in all instances
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