The legal risk if you run out of stock

How many retailers, particularly online retailers, know that:

if you are selling a product which may run out, and

you have not specified the limitations you have in availability in your advertising, you face the following penalties*:

  • you will have to supply a consumer who responds to your advert with the same or equivalent goods within a reasonable time and in a reasonable quantity, or you will have to arrange for a competitor to do so at your expense
  • if you do not, and you have received an order from a consumer, you must refund the consumer (including interest at 15.5% per year) and compensate the consumer for his costs resulting from your breach of the contract
  • if you do not supply equivalent goods or reimburse the consumer, you are in breach of the Consumer Protection Act, and any person can report you which may lead to a fine of up to 10% of your turnover (or R1 million, whichever is the higher amount) being imposed on you?

Caveat venditor.**

 

*In terms of sections 30 and 47, read with section 112 of the Consumer Protection Act

** Let the seller beware.

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