The next batch of news snippets will focus on Chapter 2, Part C of the Consumer Protection Act: the consumer’s right to choose. This week I’ll take a look at what the Act says about fixed-term agreements.
Question of the Week: What impact will the Act have on fixed-term agreements?
Consumers will be glad to hear that automatic renewal of contracts for a fixed length will be a thing of the past. You will also be able to cancel a contract at any time (subject to certain conditions).
What you need to know
- You will be able to cancel fixed-term agreements at anytime, as long as you give the supplier 20 business days notice in writing. Note that you will remain liable for any amounts owed to the supplier in terms of the agreement up to the date of cancellation.
- The supplier may also cancel an agreement 20 business days after giving written notice to the consumer if they do not comply with the agreement.
- Between 40 and 80 business days before the expiry date of the fixed-term agreement the supplier must contact the consumer in writing and include:
- any material changes that would apply if the agreement is to be renewed
- the options available to the consumer.
- The contract will automatically be continued on a month-to-month basis when it expires unless the consumer directs the supplier to terminate the agreement on the expiry date or agrees to a renewal of the agreement for a further fixed term in writing.
Interesting Fact
The length of fixed-term contracts will be determined by the minister who may “prescribe the maximum duration for fixed-term consumer agreements, generally, or for specified categories of such agreements” by notice in the Gazette.
Click here to read more news snippets about the Consumer Protection Act.
