Freedom of contract and the enforceability of exemption clauses in view of section 48 of the Consumer Protection Act

Abstract

The law of contract in South African affords parties the freedom to enter into a contract and who they wish to enter with. The general requirements for a legally enforceable contract are consent, good faith, and the sanctity of contract. The contractual freedom of parties also offers them freedom to choose the terms of their contract. Part of these terms is the freedom to incorporate exemption clauses in contracts. An exemption clause is a waiver of liability or the apportionment of risk in the event of an occurrence materialising as defined in the contract. Exemption clauses have become the norm rather than the exception and parties must therefore expect a contract to contain an exemption clause, albeit unfair. Until recently, there was no legislation that declared exemption clauses as unfair. The Consumer Protection Act is South Africa's first legislative regulation on unfair contract terms and the waiver of liability. The Act does not address the contractual freedom of parties to incorporate exemption clauses and whether they will be unenforceable in the light of section 48. The Act cannot be implemented without considering the freedom of contract to rely on exemption clauses. A literature study will be undertaken in order to establish the influence of section 48 of the Consumer Protection Act on South African law of contract and exemption clauses.