South Africa's Consumer Protection Act 68 of 2008 (the ?CPA?) was signed into law in April 2009. The CPA has been heralded as a great step forward for the protection of consumer rights and the prevention of unfair business practices in South Africa.

The CPA provided for its implementation to be staggered over an 18 month period, with two Chapters supposed to come into effect 12 months after its effective date and the remainder of its provisions after 18 months. To provide businesses with more time to prepare for the consequences of the CPA its implementation was deferred by the Department of Trade and Industry and it eventually entered into force on 1 April 2011.

The CPA has many implications for businesses in their dealings with consumers, including for the first time in South Africa the introduction of strict liability for defective, hazardous or unsafe goods. In terms of the strict liability principle producers, importers, distributors or retailers can be held liable for damage caused to consumers by defective goods or by hazardous goods that did not contain adequate warnings even where there is no fault on their side. This has forced companies to review their commercial agreements with suppliers and distributors, their warranties and to obtain additional liability insurance in many cases.

Another requirement of the CPA that has had business up in arms is the provision in Part A of Chapter 4 for the registration of business names. Historically businesses in South Africa have been allowed to make use of so called ?trading as' names, where they trade under a different name to their company or business name registered with the Companies Registrar. Section 79 of the CPA now prohibits businesses from trading under any business name unless that business name is registered with the Companies Registrar.

The good news for business is that the provisions relating to the registration of business names have not yet entered into force. The CPA provides for the Minister of Trade and Industry to publish the effective date for the implementation thereof by notice in the Government Gazette, which notice must be given at least six months prior to the effective date.
There are therefore currently no prohibitions on the creation and use of unregistered business names. However, once the Minister has determined the effective date all business names will have to be registered with the Companies and Intellectual Property Commission (CIPC) as from that date. Only where a name has been registered in terms of prior legislation or where a name has been in use for a period of more than one year prior to the effective date will such names not need to be registered. Anyone interested in the consequences of the CPA for business with regard to name changes or in general is welcome to contact Niel Joubert.

© Trade Law Chambers 2012