Category Archives: Business

What is voluntary sequestration?

The term “insolvency” relates to both sequestration (for individuals and trusts) and liquidation (for companies and close corporations). Sequestration can either be effected by voluntary sequestration or compulsory sequestration. This article will deal with voluntary sequestration, where the person applying to the Court for sequestration is the insolvent individual himself/herself.

What does “insolvent” mean?

If someone is insolvent (bankrupt), the amount of her debts is more than the value of their assets and income, and she is unable to pay her creditors (a creditor is a person or business she owes money to).

How does voluntary sequestration work?

When a person becomes insolvent, she can apply to the Court for her estate to be sequestrated. There are, however, three requirements that she will have to meet before the Court will allow her estate to be sequestrated:

  1. She must prove that her debts are actually more than the value of her assets.
  2. She must have enough assets to pay the costs of the sequestration application.
  3. She must prove that the sequestration will benefit the persons and/or businesses she owes money to i.e. they must get paid (at least something) if her estate is sequestrated.

If the Court grants permission for sequestration, it will appoint a trustee/curator by court order who must manage the insolvent estate to the equal benefit of all the creditors.

The trustee/curator will sell her assets and use the money to pay her creditors. If the money from the sale of her assets is not enough to pay all creditors in full, the money will be divided pro rata between the creditors based on the amount owed to each creditor and the order of preference of payment. Any outstanding debt that remains thereafter will be written off by the creditors.

What happens when the voluntary sequestration process has been completed?

The insolvent person can start over with no debt to his name. This makes it sound as if a person can make debt, then apply for voluntary sequestration and walk away without paying his creditors. However, being sequestrated does have disadvantages.

What are the disadvantages of voluntary sequestration?

The following disadvantages should be considered before applying for a voluntary sequestration:

  1. The sequestrated person’s credit record will get a blow as he/she will be blacklisted at credit bureaus and lose their creditworthy status.
  2. The sequestrated person can’t borrow money or incur any other debt until he/she is rehabilitated.

The sequestrated person will qualify as being rehabilitated when declared as such by the Court, which can happen four years after the sequestration date or sometimes sooner. If the Court does not declare the sequestrated person rehabilitated, he/she will automatically become rehabilitated ten years after his/her sequestration date.

  1. If a person’s estate is sequestrated, it may lead to prohibition of membership of certain professional bodies until he/she is rehabilitated, or even future exclusion from certain professions.

Who may apply for voluntary sequestration?

  1. In the case of a natural person becoming insolvent, the person himself/herself may apply, or his/her representative.
  2. Where spouses are married in community of property, both spouses must apply for voluntary sequestration at the same time.
  3. The partners in a partnership who are resident in South Africa or their representative may apply for voluntary sequestration.
  4. When a deceased estate is insolvent, the executor of the estate may lodge an application for voluntary sequestration.
  5. The curator (curator bonis) of an estate where the individual is unable to handle his/her own affairs e.g. if the individual is mentally unfit.
  6. An insolvent trust.

Voluntary sequestration is not the panacea it appears to be at the surface. Although it might be a solution for the financial problems of an insolvent person, there is a price to pay in terms of losing a creditworthy status and/or a profession together with a good reputation which might have taken years to build up.

The decision to apply for voluntary sequestration should not be taken lightly and should only be used as a last resort after all other possible avenues have been exhausted. If you need more information on insolvency and voluntary sequestration, please contact your legal advisor.

References:

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE).

Korporatiewe Beheer – Die Veilige Bewaring van Rekords

Die woord “rekords” word in Artikel 1 van die Maatskappywet No 71 van 2008 (“die Wet”), omskryf as enige inligting wat in Artikel 24 van die Wet beoog word. Artikel 24 van die Wet omskryf verskeie rekords wat deur ’n maatskappy gehou moet word, insluitend afskrifte van die maatskappy se Memorandum van Inkorporasie (“MOI”) asook die maatskappy se rekeningkundige rekords.

Daar word ingevolge Artikel 24 van die Wet vereis dat die volgende maatskappy rekords op rekord gehou moet word:

  • ’n kopie van die MOI;
  • enige wysiging aan die MOI;
  • ’n afskrif van enige reëls deur die direksie gemaak;
  • ’n rekord van ’n maatskappy se direkteure;
  • afskrifte van alle verslae wat by ’n algemene jaarvergadering voorgelê word;
  • afskrifte van alle finansiële jaarstate;
  • rekenkundige rekords soos deur die Wet vereis;
  • kennisgewings en notules van alle aandeelhouersvergaderings;
  • alle besluite wat deur die aandeelhouers aangeneem is;
  • enige dokument wat met betrekking tot aandeelhouersbesluite aan aandeelhouers beskikbaar gestel is;
  • afskrifte van enige skriftelike kommunikasie wat aan enige klas aandeelhouer gestuur is;
  • notules van alle direksievergaderings en -besluite;
  • notules van direksiekomiteevergaderings, met inbegrip van die ouditkomitee; en
  • ’n sekuriteite-register vir elke maatskappy met winsoogmerk.

Daar word van alle maatskappye vereis om ’n geregistreerde kantoor in Suid-Afrika te hê en die rekords wat hulle ingevolge Artikel 24 van die Wet in stand moet hou, moet gehou word by daardie kantoor of ’n ander ligging waarvan die Companies and Intellectual Property Commission (“CIPC”) in kennis gestel moet word. Artikel 28(2) van die Wet bepaal dat ’n maatskappy se ander rekords, insluitend rekeningkundige rekords, gehou moet word, of toeganklik moet wees by die maatskappy se geregistreerde kantoor. ’n Maatskappy moet aanvanklik in sy MOI besonderhede van die ligging van sy geregistreerde kantoor verskaf en enige verandering daarna moet by wyse van kennisgewing aan die Kommissie gelewer word.

Alle maatskappy-rekords moet bewaar word in skriftelike, elektroniese of ’n ander formaat, wat dit moontlik maak om die inligting binne ’n redelike tyd in skriftelike formaat weer te gee.

Soms is ’n maatskappy se geregistreerde kantoor en sake-adres nie dieselfde nie – Artikel 23(3) van die Wet bepaal dat ’n maatskappy se geregistreerde adres die adres van die ligging van die maatskappy se kantoor of dan eerder die ligging van die maatskappy se hoofkantoor moet wees.

Die regulasies wat deur die Minister uitgevaardig is, skryf die termyn waarvoor maatskappy-rekords in stand gehou moet word, voor. Waar verskillende wetgewing verwys na die bewaring en gebruik van rekords, moet maatskappye aan die strengste van die wetgewende vereistes voldoen. Byvoorbeeld, die Wet op Belasting of Toegevoegde Waarde No 89 van 1991 stipuleer dat fakture gehou moet word vir vyf jaar vanaf die datum wat die opgawe ingedien is, maar die Wet sal vereis dat finansiële rekords vir ’n minimum van sewe jaar gehou word en daarom moet die maatskappy voldoen aan die strengste voorskrif van sewe jaar.

Waar wetgewing verwys na verskillende rekords (byvoorbeeld indiensneming-rekords teenoor rekenkundige rekords), dan is die vereistes spesifiek tot daardie wetgewing en moet aangewend word ooreenkomstig die betrokke rekords. Dit is belangrik om daarop te let dat die Wet ’n algemene vereiste ten opsigte van enige rekords en inligting het, wat ’n maatskappy vereis word om te hou in terme van die Wet of enige ander wetgewing, naamlik om hierdie inligting en rekords vir ’n periode van minstens sewe jaar (of die langer periode voorgeskryf deur die betrokke wetgewing) te bewaar.

In sekere omstandighede vereis wetgewing dat rekords bewaar moet word vir ’n onbepaalde tydperk. Die term “onbepaald” word nie gedefinieer in wetgewing nie, maar stipuleer duidelik dat rekords bewaar word vir solank as wat die betrokke entiteit bestaan. Sodra die entiteit nie meer bestaan nie, verval die “onbepaalde” tydperk ook. In die geval van ’n maatskappy, bestaan die verpligting slegs ten opsigte van ’n entiteit wat geregistreer is en bly by CIPC. Sodra ’n entiteit gederegistreer is, kan ander wetgewing vereis dat rekords gehou word, maar slegs vir ’n spesifieke periode en nie “onbepaald” nie. In die geval van likwidasie en sekwestrasie in terme van die Wet op Insolvensie No 24 van 1936, is daar spesifieke vereistes wat betrekking het tot die veilige bewaring van rekords. Omdat ’n gederegistreerde maatskappy gerestoreer kan word, of litigasie kan geskied in terme van ’n gederegistreerde maatskappy, is dit belangrik dat ’n gederegistreerde maatskappy se dokumentasie bewaar word vir ’n redelike tydperk van ten minste drie jaar na deregistrasie.

Hierdie is ‘n algemene inligtingstuk en moet gevolglik nie as regs- of ander professionele advies benut word nie. Geen aanspreeklikheid kan aanvaar word vir enige foute of weglatings of enige skade of verlies wat volg uit die gebruik van enige inligting hierin vervat nie. Kontak altyd u regsadviseur vir spesifieke en toegepaste advies. (E&OE)

Do you want to deregister your company?

When the time has come to close shop, a company or close corporation may be deregistered upon request from the company or close corporation or any other third party, but only provided that the company or close corporation:

  1. has ceased to carry on business; and
  2. has no assets or, because of the inadequacy of its assets, there is no reasonable probability of the company being liquidated.

What is needed from the company?

In order for the Companies and Intellectual Property Commission (CIPC) to process the deregistration request, the following information is required on an original letter head of either the company, close corporation or any other third person applying for deregistration:

    1. A statement confirming that

a. the company or close corporation is not carrying on business or is dormant; and

b. has no assets, or because of the inadequacy of its assets, that there is no reasonable probability of the company being liquidated (if third party, the statement must be supplemented with sufficient documentary proof confirming the statement).

    1. A tax clearance certificate or any other written confirmation from SARS that no tax liability is outstanding (an affidavit if not registered for tax).
    1. If the company or close corporation submits the request, the letter must be signed by each active director, or otherwise by the person who is requesting the deregistration.
    2. The tax number (if available).
    3. A certified ID copy of any of the persons signing the letter wherein deregistration is required.

When a business/company has been deregistered with the CIPC, it implies the business/company is no longer registered and has no legal standing since it’s not doing any business nor has any assets or liabilities.

References:

  • Companies and Intellectual Property Commission | CIPC
  • The South African Revenue Service | SARS

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

New requirements to re-instate a company or close corporation

A company or close corporation may be deregistered upon request from the company or close corporation or any other third party. A company or close corporation may also be re-instated. However, since the withdrawal of Practice Note 6 of 2008, and its replacement with Notice 08 of 2017, there are new requirements for the re-instatement.

The Practice Note is issued in terms of Regulation 4(2)(b) of the Companies Regulations, 2011, and is applicable to the re-instatement of companies and close corporations in terms of Companies Regulation 40(6) and (7).

What are the new requirements?

Since December 2016, to re-instate a company or close corporation, the re-instatement application on a form CoR40.5 must comply with the following requirements regardless of the cause or date of deregistration:

  • Certified identity copy of the applicant;
  • Certified identity copy of the owner of the customer code;
  • Multiple deed search (deed search of each of the 10 regional deeds offices);
  • Letter from the Department of Public Works, only if the multiple deed search reflects immovable property;
  • Sufficient documentary proof indicating that the company or close corporation was in business or that it had any outstanding assets or liabilities, at the time of deregistration;
  • Mandate from the applicant confirming that the customer may submit on his/her behalf.

When can a company or close corporation be re-instated?

CIPC will only consider re-instating a company or close corporation if it can provide proof that it was conducting business at the time of deregistration, or has any other economic value. Furthermore, upon the successful processing of the re-instatement application, all outstanding annual returns must be filed in order to complete the process, within 30 business days from date of the re-instatement.

Reference:

  • Companies and Intellectual Property Commission | CIPC. Practice Note 08 of 2017, Requirements for re-instatement in terms of Regulations 4(2)(b).

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

The compulsory rotation of auditors

Every public and state-owned company has to appoint an auditor and a company secretary.  However, in terms of section 92 of the Companies Act, 2008, the same individual is not allowed to serve as the auditor or designated auditor of a company for more than 5 consecutive financial years.

 What does this mean for my company?

  • If an individual has served as the auditor or designated auditor of your company for 2 or more consecutive financial years, and then ceases the position, the individual may not be appointed again as the auditor or designated auditor of the company until after the expiry of at least two further financial years.
  • If your company has appointed 2 or more persons as joint auditors, you must manage the required rotation in a way that all of the joint auditors do not relinquish office in the same year.

Despite the strict requirements for public and state-owned companies, it is not compulsory for private or personal liability companies to appoint an auditor, unless the company is required to produce audited financial statements.

Is this for the better?

It is understood that the external audit function is an activity of public protection and provides credibility to financial statements and assurance to investors. However, auditor rotation could lead to additional costs to companies, as the new auditor would be required to perform additional procedures on the opening balances of their new client.

In some areas, it could also impact negatively on the availability of auditors, as some towns only have a limited number of registered auditors. Auditors practicing as sole practitioners will also be affected, and could lose long-term clients unless they bring in another registered auditor and expand their practice.

References:

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Social Media: What line can’t I cross as an employee?

There are cases of employees posting sensitive or disrespectful information and messages about their employers online. This might seem like an innocent joke with the people on your social media feed, however, the backlash is far more serious than that. The conduct of employees on social media platforms is also more frequently exposing employers to the risk of vicarious liability and brand damage.

In considering the risks to employers (and their employees), it is necessary to keep in mind:

  1. the impact of social media on the Constitutional rights to dignity, privacy and freedom of expression;
  2. the risks that defamatory or harassing statements may result in vicarious liability for employers;
  3. the risk of work place harassment and cyber-bullying and the impact of this conduct on the work environment; and
  4. what conduct may justify disciplinary action and even dismissal.

 What if an employee posts something negative about their employers?

An employer does have recourse against employees whose social media blunders cause brand damage, or result in the disclosure of confidential information or vicarious liability. The CCMA has accepted that certain conduct on social media may warrant disciplinary action. However, the ordinary principles of fairness and equity apply. When investigating such conduct, care must be taken not to unlawfully infringe rights to privacy and the provisions of the Regulation of Interception of Electronic Communications Act.

In the case of Beaurain v Martin NO & others (2014), Mr Beaurain, was employed by Groote Schuur Hospital. During his employment, he raised various complaints regarding health issues at the hospital. Each complaint was investigated and he was informed that the complaints were without merit. Getting no joy from the hospital, Mr Beaurain started posting his complaints on Facebook. Eventually, the head of Mr Beaurain’s department addressed a letter to him to inform him that he was to stop posting his claims pertaining to health risks at the hospital, on social media. Mr Beaurain did not heed this instruction. This resulted in another letter in which was given a final warning to stop the conduct.

After an angered Facebook post where he attacked the state of the hospital, he was charged with gross insubordination and dismissed. Mr Beaurain referred a dispute to the Labour Court. His dismissal was found to be fair.

Conclusion

Not all comments on social media that are critical of an employer will warrant dismissal. For example, if the post constitutes conduct in alignment with a protected strike or amounts to a protected disclosure, dismissal is not allowed. However, employees should be careful not to post information regarding their employers that could put the brand name in jeopardy or reveal confidential company information.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

How to register a trademark in 2017

If you have a business and wish to keep competitors from using, or misusing, your brand, then you should consider registering a trade mark for your company’s name and logo.

A trade mark can only be protected and defended under the Trade Marks Act, 1993, if it is registered. However, unregistered trade marks may be defended in terms of common law. The registration procedure results in a registration certificate which has legal status, allowing the owner of the registered trade mark the exclusive right to use that mark.

Where do I register a trade mark?

The Companies and Intellectual Property Commission (CIPC) administers the Register of Trade Marks which is the record of all trade marks that have been formally applied for and registered in South Africa.

A trade mark is only registrable if it serves the purpose of distinguishing the goods/services of one trader from those of another trader. Other points to remember include:

  1. It must not have become customary in your field of trade.
  2. It does not represent protected emblems such as the national flag or a depiction of a national monument such as Table Mountain.
  3. It is not offensive or contrary to the law or good morals or deceptive by nature or way of use.
  4. There are no earlier conflicting rights.

How to register a trade mark?

  1. Register as a customer on CIPC: Go to the CIPC website (www.cipc.co.za). If you are already registered as a customer, and know your customer code and password, then continue with the next step.
  2. Deposit funds: Deposit the application fee of R590 regarding every class and every trade mark applied for into the CIPC bank account using your customer code as reference.
  3. Conduct a search: In order to conduct a search, you can request a special search from CIPC, or you can conduct a cursory e-search yourself.

A registered trade mark can be protected forever, provided it is renewed every ten (10) years upon payment of the prescribed renewal fee.

To make the process easier and more successful, then contact your legal adviser, who can lodge a trade mark application on your behalf and ensure all your documentation is correct.

References:

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Is your Business POPI Compliant?

POPI refers to South Africa’s Protection of Personal Information Act which seeks to regulate the Processing of Personal Information.

What is Personal Information?

Means any information relating to an identifiable, living natural person or juristic person (companies, CC’s etc.) and includes, but is not limited to:

  • Contact details: email, telephone, address etc.
  • Demographic information: age, sex, race, birth date, ethnicity etc.
  • History: employment, financial, educational, criminal, medical history
  • Biometric information: blood type etc.
  • Opinions of and about the person
  • Private correspondence etc.

What is Processing?

Processing broadly means anything done with someone’s personal Information, including collection, usage, storage, dissemination, modification or destruction (whether such processing is automated or not).

Some of the obligations under POPI:

  • Only collect information that you need for a specific purpose.
  • Apply reasonable security measures to protect it.
  • Ensure it is relevant and up to date.
  • Only hold as much as you need, and only for as long as you need it.
  • Allow the subject of the information to see it upon request.

Does POPI really apply to me or my business?

POPI applies to every South African based public and/or private body who, either alone, or in conjunction with others, determines the purpose of or means for processing personal information in South Africa.

There are cases where POPI does not apply. Exclusions include: Section 6:

  • purely household or personal activity.
  • sufficiently de-identified information.
  • some state functions including criminal prosecutions, national security etc.
  • journalism under a code of ethics.
  • judiciary functions etc.

Why should I comply with POPI?

POPI promotes transparency with regard to what information is collected and how it is to be processed. Openness increases customer trust in the organisation.

Non-compliance with the Act could expose the Responsible Party to a penalty of a fine and/or imprisonment of up to 12 months. In certain cases, the penalty for non-compliance could be a fine and/or imprisonment of up 10 years.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

How to register a new company

a1bThe basic steps to register a company under the Companies Act of 2008 at the Companies and Intellectual Property Commission (CIPC) involves certain forms and supporting documentation that must be lodged and the accompanied fees paid.

The steps

The first step in registering a new company is optional. A CoR9.1 form must be completed and lodged with the CIPC in order to reserve a name for the company to be registered. However, the Act does make provision for a company to be registered without a name. The company registration number will then be the name of the company until such time as the company properly registers a name. A certified copy of the identity document of the applicant must be submitted as supporting documentation with this form and a filing fee is payable.

The next step is to complete and lodge the CoR14.1 Notice of Incorporation form together with the CoR15.1 Memorandum of Incorporation.

The Notice of Incorporation specifically contains information regarding the type of company to be registered, the incorporation date, financial year end, registered address, number of directors and the company name if applicable. A certified copy of the identity document of the applicant must be submitted as supporting documentation and a filing fee is payable. A CoR14.1A form contains specific information about the directors of the company who will be appointed at registration, and this form must be lodged together with the Cor14.1. Certified copies of the identity documents of all directors to be appointed must be submitted as supporting documentation. An optional form CoR14.1D may be lodged together with the CoR14.1, which indicates any company appointments to be registered with the CIPC, such as a company secretary or auditor.

The Memorandum of Incorporation is probably the most important document when registering a company, since the provisions contained herein will govern the company. It can be short and simple, or long and extremely technical, depending on what type of company is being registered. In this regard, it is best to seek professional advice. The supporting documentation and filing fees applicable will depend on what type of Memorandum of Incorporation is being registered.

If an auditor or company secretary is appointed at registration as contained in the CoR14.1D, a CoR44 form must also be completed and submitted. No filing fee is payable for this form. An original acceptance letter and certified copy of the identity document of the auditor or company secretary must be submitted as supporting documentation.

The CoR21.1 Notice of Registered Address must be completed with the particulars of the registered address of the company. Again a certified copy of the identity document of the applicant must be submitted as supporting documentation, but no filing fee is payable.

Once all the necessary forms and supporting documentation has been submitted and applicable fees paid, the CIPC will issue a Registration Certificate form CoR14.3 if it is satisfied that all provisions in the Act has been satisfied.

Any changes to the information placed on record at the CIPC at the original registration of the company, must be registered without delay and on the proper forms and possible payment of applicable filing fees.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

I bought something that doesn’t work

Sarah buys furniture from Mark who promised her that the furniture is of good quality. However, he doesn’t notify her about problems with the furniture. Later, Sarah discovers that some of the chairs she bought have faulty joints, meaning they can’t be used properly. This is what’s called a latent defect and Sarah will be able to claim from Mark for the furniture not fulfilling its purpose.

                                                                                                                          A patent defect or a latent defect?

A patent defect is when there’s a problem with a purchased item but it was clearly visible and obvious to the buyer when the contract was signed. If the furniture that Sarah bought had a patent defect, such as a chair leg missing, it would be assumed that she knew about it and the law would not protect her.

NOTE: A defect is something that makes the product less useful or completely useless. A product not looking as good as you thought is not a defect. A piece of furniture with a stain on it can still be used normally. If the product has broken or missing parts, meaning it can’t be used properly, it’s a defect.

If the product you bought has a defect affecting its usability and purpose, then the seller is liable and you as the buyer can claim from them. You should also take into account if the contract had a “voetstoots” clause, meaning that you are buying a product based on its appearance or “as is”. If this is the case the seller would not be held accountable for any defects with the product, latent or patent.

What can I get back from the seller?

If the product you bought has a latent defect you can get a price reduction or a refund for the price you paid. A price reduction is the difference between the price you paid and the true value of the product. A full refund includes the price you paid, interest, maintenance costs and the cost of receiving the product. A full refund would also mean that you need to return the product that you got under the contract.

If a defect has caused you harm or damaged your property, for instance, you could possibly also claim this amount as compensation from the seller.

Who is a trader and who is a seller?

It’s important to keep in mind that there’s a difference between someone who is a trader and a seller. A trader is someone who makes a living from selling products, whereas a seller is an ordinary person like Mark in the example above. A trader who specialises in particular products and boasts having a specialized knowledge is held to a higher standard than an ordinary seller.

Sales talk or latent defect

It’s normal for sellers or traders to do the best to sell their product. This usually means “sales talk” or boasting about the products value and usefulness. They are allowed to do this, however, if they make statements about the product that turn out to be false, such as claiming the product can do something that it actually can’t, the law will be in your favour and protect you in the same way as a latent defect.

Before you agree to buy anything from a seller or a trader make sure you inspect the product first and make note of any defects there might be. If you neglect to inspect the product it could be more difficult for you to get compensation from the seller if there is a problem in the future.

Reference:

  • “What you should know about Contracts”. 2009. The Western Cape Office of the Consumer Protector. Department of Economic Development and Tourism. Accessed from: https://www.westerncape.gov.za/ on 13/05/2016.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)