Applicability of the Consumer Protection Act 68 of 2008 to international electronic transactions

Abstract

The promulgation of the Consumer Protection Act 68 of 2008 (CPA) in South Africa made it easier for consumers to participate in international electronic transactions by means of electronic communication devices and the Internet. Such communication inevitably leads to legal consequences for both consumer and the supplier. The Green Paper from the European Commission 1 includes a clause that is very much appealing to the country like South Africa. The choice of applicable law is covered in section 5 of the CPA. This is more in line with the Green Paper from the European Commission. It means, therefore, that when the foreign suppliers sell across borders, the contracts that they conclude with consumers are subject to the different rules in force in South Africa. In this, consumers are resident, irrespective of whether a choice of law is made or not.2 Both Electronic Communication and Transaction Act 25 of 2002 (ECTA) and CPA provide a clear protection to the consumer when it comes to the choice of the applicable law to govern a transaction. The ECTA is not a primary legislation on consumer protection but it properly complements CPA when it comes to consumer an online transaction. This means a South African consumer will be afforded the consumer protection even when contracting with a vendor in a foreign jurisdiction with a different legal system. However, it is uncertain how this provision will be enforced on an international level. A choice of law in an online transaction is one aspects of consumer legislation that has not been yet tested as to whether they can provide guidance for the courts when it comes to foreign jurisdictions and applicable laws in a particular electronic transaction agreement. The applicable law in a consumer protection transaction in the UK goes to the element of preventing supplier to deprive consumer a right to redress. The South African aspects of the jurisdiction and applicable law are compared to the UK laws on consumer protection. The most crucial consumer protection aspect is to protect the weaker party. Although the issue on the applicable law is certain, the issue on (civil) jurisdiction has not been given sufficient attention by the South African consumer protection legislation. South African consumer legislation is compared to the UK and EU consumer legislation that clearly states that the consumer can sue or be sued in his place of residence. The UK consumer rights do not give a supplier and option to sue the consumer as per normal civil procedure route. In UK a supplier will only litigate against consumer at a court or body where consumer resides. This is not sufficiently covered in the South African legislation protecting consumers’ rights. The CPA section 115 on civil jurisdiction is silence on the consumer instituting legal action in the body or court of his/her residence. The legal implication for this shortcoming is that the South African consumer could be sued as per normal procedure. For instance where the consumer default and such transaction is concluded in a different jurisdiction. This will mean the supplier has an option of not following the defendant and this will be worse when the foreign jurisdiction is involved. This is highly possible on the electronic transaction agreements which are standard as most of them are drafted by the suppliers in their countries and he cannot predict a law of a country he doesn’t know.