What defects are covered by the voetstoots clause? 

Noluthando Ndala | Candidate Attorney | Barnard Inc.

A voetstoots clause is often associated with a ‘tough tekkies’ attitude when it comes to defects in -second-hand products bought and sold. The South African law is clear on the kinds of defects that can be claimed by sellers.

It will often be necessary for small businesses to purchase second-hand goods from local suppliers. In most cases, a voetstoots clause will be part of the contract.

The voetstoots clause indemnifies the seller from any liability for latent defects in the item(s) sold. A defect is a flaw that creates an unreasonable risk of harm in the item’s normal use. A defect is either defined as latent or patent. A latent defect is a material defect, which is not visible after reasonable inspection of the item, whereas a patent defect is one that is easily discovered by any person doing a thorough inspection. The inclusion of a voetstoots clause in a transaction means that the seller ‘contracts out’ of ensuring there are no latent or patent defects, meaning when an item is sold, it is sold with all its faults or “as it stands”. This term must expressly form part of the contract and it cannot be implied.

If a misrepresentation – (which is a false statement of a material fact made by one party which affects the other party’s decision in entering a contract) is made, the seller cannot rely on the voetstoots clause. Thus, an exception to the enforcement of the voetstoots clause is that the seller will not be relieved of responsibility for the selling of defective items when the seller has acted fraudulently or with malicious intent. If the purchaser can prove that the seller was aware of the latent defect and failed to disclose this to the purchaser, the seller will be held liable should the defects be discovered. This precedent was set in Odendaal v Ferraris (422/2007) [2008] ZASCA 85 where the Court held that it is commonly understood “that if a purchaser hopes to avoid the consequences of a voetstoots sale, he must show not only that the seller knew of the latent defect and did not disclose it, but also that he or she deliberately concealed it with the intention to defraud”. 

What remedies can be relied upon if you have entered into a prejudicial sales contract containing a voetstoots clause?

Section 55 of the Consumer Protection Act, no 68 of 2008 (‘The Act’) states that a purchaser is entitled to receive property that is suitable for the purpose which it is intended, is of good quality, in good working condition and free of defects. It also states that the property or goods must be usable and durable for a reasonable period, failure to which will afford a purchaser certain remedies. These remedies include that of repair, replacement, or a refund. Although each contract has an implied warranty of quality, purchasers need to be aware that not every breach thereof will lead to a reimbursement for full damages. Another important aspect to note is that a voetstoots clause cannot be included in sale agreements where the seller is acting within the course and scope of its ordinary business.  This means is that suppliers, in the normal course of business, cannot waive their responsibility towards the service rendered/product sold, unless the agreement is between private persons acting outside of the scope of their ordinary course of business. Juristic persons with an annual turnover of more than R2 000 000.00 are also precluded from benefitting from the provision of the Act. 

If you are the seller in a transaction where a voetstoots clause is applicable, it is recommended that you disclose all defects as an annexure to the agreement of sale. This annexure should be incorporated by both the seller and the purchaser.  A seller should understand when an agreement is subject to provisions of the Consumer Protection Act and whether a voetstoots clause may be incorporated into an agreement of sale. If in doubt, particularly in the case of large transactions, always consult a commercial attorney.

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