3023 Franchise agreements and the Consumer Protection Act Franchise agreements

3023 franchise agreements and the consumer protection

This preview shows page 243 - 245 out of 265 pages.

30.2.3 Franchise agreements and the Consumer Protection Act Franchise agreements are specifically regulated by the Act (see also paragraph 18.7 ). The Act provides that a franchise agreement between a franchisee and franchisor must comply with the following requirements: the franchise agreement must be in writing and signed by or on behalf of the franchisee the agreement must include any prescribed information or it must address any prescribed categories of information as required by the Minister, and the agreement must be in plain and understandable language. The Act makes provision for a cooling-off right where a franchisor and franchisee have entered into an agreement. In terms of the cooling-off right, a franchisee may cancel a franchise agreement for any reason without incurring any cost or penalty within 10 business days after signature of the agreement by giving written notice to the franchisor. Page 510 30.2.4 Fundamental consumer rights in terms of the Consumer Protection Act 30.2.4.1 Right of equality Section 8 of the Act prohibits the supplier of goods and services from unfairly discriminating against a person or category of persons on the grounds listed in the Constitution and the Promotion of Equality and Prevention of Unfair Discrimination Act 4 of 2000. These grounds include race, gender, sex, pregnancy, marital status, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, culture, language and birth. Although the Act allows differentiation on reasonable grounds, it does not allow discrimination. For example, it will not constitute a contravention of the Act to market any goods or services in a way that gives preference to a particular group of consumers, if those goods or services are reasonably intended to satisfy a specific need of that group of consumers. So, the marketing of high-heeled shoes for women only will not constitute discrimination. A consumer alleging breach of the equality provisions may institute proceedings before an equality court or file a complaint with the Consumer Commission (see paragraph 30.2.6.1 ), and if the complaint
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appears to be valid, the Consumer Commission must refer it to the equality court. If a court will have to assess the fairness or reasonableness of conduct, all the factors and circumstances of a particular form of conduct will be taken into account. 30.2.4.2 Right to privacy Sections 11 and 12 protect the consumer’s right to privacy by placing restrictions on direct marketing. ‘Direct marketing’ means to approach a person, in the ordinary course of business, either in person or via mail or electronic communication, for the purpose of promoting or offering to supply goods or services to him or her. It also refers to approaching a person either in person or via mail or electronic communication for the purpose of requesting the person to make a donation.
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