Impact of looting on consumers who are awaiting delivery of goods

The recent violence and looting in Gauteng and KZN has resulted in many suppliers being unable to deliver goods to consumers who have already paid for them. For instance, John bought an engagement ring from a jeweller at a shopping mall in KZN. He paid R59 999.00 for an 18ct white gold and diamond ring and left it with the jeweller to be resized.

 

Unfortunately for John, this was just before the riots broke out and the shopping mall in which the jeweller is located was exhaustively looted and John’s engagement ring was stolen. The jeweller has raised force majeure and has refused to refund John the R59 999.00 that he paid for the ring. Does a consumer like John have any legal recourse?

 

Force Majeure

Force majeure refers to an unforeseen event or circumstance which is beyond the control of a party to a contract and renders the performance of that party under a contract impossible. When John purchased the engagement ring from the jeweller, John and the jeweller entered into a contract in terms of which the jeweller agreed to supply John with a specific ring and John agreed to pay R59 999.00 for that ring. Under normal circumstances, if the jeweller failed to deliver the engagement ring to John, John would be entitled to sue the jeweller for breach of contract.

 

However, because the riots and looting occurred after the contract was concluded and amounted to an unforeseen event which was beyond the control of the jeweller, our law allows the jeweller to raise the defence of force majeure. This means that  John is no longer entitled to sue the jeweller for breach of contract and the jeweller does not have to refund John the R59 999.00 that he paid for the ring.

 

Consumer Protection Act

Where the common law fails John, the Consumer Protection Act (“CPA”) provides John with the relief to which he should be entitled. Section 19(2)(c) of the CPA has turned the force majeure rule on its head and provides that goods to be delivered to a consumer (which includes goods that a consumer still has to collect) remain at the risk of the supplier until the consumer has accepted delivery of the goods.

 

What this means for John is that, until he has collected the ring from the jeweller, the jeweller bears the risk if the ring is stolen and in that case, must refund John the purchase price or replace the ring.

 

Lay-by

What if John had not paid the full purchase price for the ring, but had instead made use of lay-by? Sections 62 and 65 of the CPA make it clear that the jeweller will still be liable to John for a refund of the amounts paid to the jeweller under the lay-by. Section 62(1) states “each amount paid by the consumer to the supplier remains the property of the consumer, and is subject to section 65, until the goods have been delivered to the consumer.”

 

Section 65 provides that the supplier is liable to the consumer for any loss during the period that the consumer is paying the instalments. This means that, in the context of a lay-by, every instalment that a consumer pays to a supplier belongs to the consumer and the consumer is entitled to have all that money paid back to them if the supplier is unable to honour the lay-by and deliver the goods to the consumer.

 

Our advice to suppliers who have lost lay-by goods in the riots, that they replace the goods instead of having to repay their lay-by consumers.

[the image in this post is of a ring by Indigo Lily Bespoke Jewellery- contact Andrea Neethling – Goldsmith and Business Owner on andreaneethling@rocketmail.com or Facebook.com/IndigoLilyJewellery or @helloindigolily]

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