Browsing by Author "Naude, Tjakie"

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    An analysis of the regulatory principles of functional equivalence and technology neutrality in the context of electronic signatures in the formation of electronic transactions in Lesotho and the SADC region
    (2018) Kulehile, Matsepo Regina; Collier, Debbie; Naude, Tjakie
    Despite the steady growth of electronic commerce (e-commerce), Lesotho and SADC users are uncertain of how to securely sign e-communications practicably. This results in users' lack of confidence in the use of e-commerce. SADC and Lesotho regulatory bodies have developed legal instruments including model laws and bills in an attempt to regulate electronic signatures (e-signatures) in e-commerce to address this problem amongst others. However, it is unclear whether the approach adopted will ensure that the regulatory instruments effectively regulate e-signatures and consequently promote the growth of e-commerce and enhance the socio-economic development of the state. This study examines what the information and communications technology regulatory principles of functional equivalence and technology neutrality entail, their interpretation by the United Nations Commission on International Trade Law (UNCITRAL), and their appropriateness for effective regulation of e-signatures through conceptual analysis. In particular it examines the UNCITRAL Model Laws on e-commerce, UNCITRAL Model on e-signature and the United Nations Convention on the Use of Electronic Communications in International Contracts. The study describes the technical operation of different offline and online signatures in order to appreciate how e-signatures should be regulated. Through textual analysis, it examines whether regulatory instruments of Lesotho and SADC correctly apply the theories in a way that will render use of e-signatures practicable and their regulation effective. It also examines initiatives on regulation of e-signatures in South Africa, the United States of America and the European Union. The study reveals that the purpose of the signature formality is to promote certainty, prevent fraud and provide evidence of a contract despite the form of signature. Although not perfect, functional equivalence and technology neutrality principles render regulation of electronic signatures effective since rules that align with them promote equivalence of legal treatment between offline and online signatures. Consequently, the UNCITRAL's Convention reflects that ordinary e-signatures can meet purposes of the signature formality where appropriate if they observe its functional equivalence criteria. However, the reliability of such electronic signatures is a question of evidence as is the case in offline contracts. Thus, soft laws on electronic evidence must complement the e-signature rules to ensure equivalent legal treatment of signatures. The study reveals that the Lesotho instruments do not fully align with the regulatory principles whereas the SADC instrument closely aligns with them. To different extents, these instruments do not adequately address the problems of users and may inhibit the growth of e-commerce. It further found that the instruments erroneously exclude certain matters such as wills from e-signature application while they correctly exclude others such as negotiable instruments from e-signature application. Lastly it found that the UNCITRAL convention and the US instruments provide better models for effective regulation of e-signatures. By implementing amendments suggested by this study, Lesotho and SADC will address the challenges faced by e-commerce users and make the use of e-signatures feasible for all. Consequently, the instruments will effectively increase the growth of e-commerce and in turn enhance the development of socio economic growth of the SADC region.
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    The consumer's right to safe, good quality goods and the implied warranty of quality under Sections 55 and 56 of the Consumer Protection Act 68 of 2008
    (Juta, 2011-07-01) Naude, Tjakie
    Chapter 2 Part H of the South African Consumer Protection Act, 68 of 2008 ('the CPA') protects the consumer's 'right to fair value, good quality and safety'. This contribution focuses on two sections in this part of the Act, namely section 55, headed 'Consumer's right to safe, good quality goods' and section 56, headed 'Implied warranty of quality'. In the course of explaining the contents of these sections, problematic aspects are identified and proposals made for legislative amendment and interpretation. Some brief comparisons are drawn with the EC Consumer Sales Directive and the Proposal for a Regulation of the European Parliament and of the Council on a Common European Sales Law ('CESL') which was current at the time of writing. Reference is also made to proposals made by the Law Commissions of England and Wales and of Scotland on consumer remedies for faulty goods.
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    The consumer’s right to fair, reasonable and just terms under the new Consumer Protection Act in comparative perspective
    (Juta, 2009-12-01) Naude, Tjakie
    This article considers the provisions on the consumer's right to fair contract terms in the South African Consumer Protection Act in comparative perspective. Various recommendations are made for the amendment of the provisions and for interpretation thereof.
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    Enforcement and effectiveness of consumer law in South Africa
    (Springer, 2018) Naude, Tjakie; Barnard, Jacolien; Micklitz, Hans-W; Saumier, Genevieve
    This chapter discusses and evaluates the enforcement and effectiveness of Consumer Law in South Africa. It first provides the principal legal and policy framework, including the legislation and common law and consumer policy and strategic plans of the governmental authorities and enforcement agencies. It sets out details and some statistics regarding enforcement by specialised enforcement agencies, such as the National Consumer Commission, the National Credit Regulator and provincial consumer protection authorities. Alternative dispute resolution actors are discussed, including ombuds enforcing the Consumer Protection Act and ombuds in the financial services sector. Thereafter enforcement by the courts are considered, as well as enforcement through collective redress. The role of consumer organisations and private regulation are discussed, as well as sanctions for breaches of consumer law. External relations and cooperation of the State, enforcers and consumer organisations with bodies external to South Africa are considered. Finally, the effectiveness of the enforcement mechanisms is critically evaluated and some proposals for reform made.
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    Enforcement procedures in respect of the consumer’s right to fair, reasonable and just terms under the new Consumer Protection Act in comparative perspective
    (Juta, 2010-12-01) Naude, Tjakie
    This article investigates the enforcement procedures available in respect of a consumer’s right to fair contract terms under the South African Consumer Protection Act ('CPA'), in comparative perspective, particularly with reference to the UK. The overarching question that is addressed is whether the enforcement procedures and other parts of the Consumer Protection Act relevant to unfair contract terms reflect an effective, preventative or proactive control paradigm to operate in tandem with reactive or ‘ex post facto’ judicial control over individual contracts. The article is structured as follows. First, a brief overview with preventative control in the UK is provided. Thereafter, several aspects of a system of so-called general use challenges will be considered. General use challenges refers to challenges to contract terms where a public enforcement body or consumer organisation represents the collective interest of all consumers in fair terms, without any individual consumer being named as represented in the court action, and where no harm to individual consumers need be shown. The aspects considered are, first, which agencies are, or should be, empowered to bring general use challenges. The second question considered is whether a public enforcement body is, or should be, obliged to act upon a complaint by applying for an interdict if negotiations with the supplier fail. Thirdly, the powers that should be granted to an enforcement body to facilitate general use challenges are considered, as well as the procedure that ought to be followed. Thereafter the article considers possible court orders for which unfair terms legislation should ideally provide to facilitate preventative control. Fifthly, other parts of the legislation (in addition to the ‘procedural part’) which should be geared towards a preventative control paradigm are identified. This comprises a proposal for the wording of a so-called grey list of contract terms that are presumed to be unfair. Thereafter extra-legislative strategies are examined, especially action on sectoral level and dissemination of information. Finally, the need to provide for regional co-operation is discussed.
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    Factors relevant to the assessment of the unfairness or unreasonableness of contract terms: some guidance from the German law on standard contract terms (2015) 26 Stellenbosch Law Review 85-109.
    (Juta & Co, 2015-05-01) Naude, Tjakie; Koep, Charlotte
    This article considers factors relevant to the unfairness or unreasonableness of contract terms. It focuses on factors that have crystallised in German case law and academic commentaries on § 307(1) of the German Civil Code, which essentially provides that “provisions in standard business terms are ineffective if contrary to the requirement of good faith, they unreasonably disadvantage the other party to the contract with the user.” The German case law and academic commentary are useful to consumer contracts generally as most terms in consumer contracts are not negotiated anyway. The article also argues for improvement of s 52 of the South African Consumer Protection Act, which lists some factors relevant to the unfairness enquiry.
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    Pre-emption agreements and the myth of the “trigger event” as any manifestation of a decision to sell: a response to Deeksha Bhana
    (LexisNexis, 2011-12-01) Naude, Tjakie
    The default construction of pre-emption agreements proposed by Bhana is heavily influenced by the assumption that every contract of pre-emption entails that upon occurrence of a 'trigger event' an enforceable obligation to make an offer arises. As already noted, in Bhana’s construction, any manifestation of a desire to sell should amount to such a trigger event. Her assumption is mistaken. As argued in detail elsewhere (Naude 2004 South African Law Journal 636), two types of rights of pre-emption should be recognized when formulating residual rules for preference agreements / pre-emption agreements which contain an obligation not to contract with a third party first. As far as residual rules are concerned, any lesser manifestation of a desire to sell should only trigger a right to buy where the price at which the holder may buy is predetermined in the pre-emption contract itself (including by the creation of some mechanism for future determination of the price). This would be the case, for example, where the holder has a right to buy at a price to be determined by a third party when the grantor decides to sell. In that case, the grantor has no interest in sounding out the market. This type of (rare) right of pre-emption amounts to a conditional option, the condition being a manifestation of a decision to sell. But where the price is not pre-determined there are important policy reasons why only a contract with or offer to a third party in breach of the right of pre-emption should trigger the holder's right to buy. Inter alia, the grantor has a legitimate interest in sounding out the market first by soliciting offers from third parties and negotiating with third parties etc in order to determine the best possible price available, as long as the grantor does not offer to contract with or contracts with a third party first, but gives the holder the first chance to match a price offered by a third party for example. There are no reported South African cases in which a holder was entitled to exercise a right of pre-emption upon a lesser manifestation of a desire to sell. The suggestion in Soteriou v Retco Poyntons that "refusal imports an offer" to be made once the grantor desires to contract was only obiter as in that case the grantor did contract with a third party first without giving the holder a chance to contract first.
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    The principle of reciprocity in continuous contracts like lease: what is and should be the role of the exceptio non adimpleti contractus (defence of the unfulfilled contract)
    (Juta, 2016-11-01) Naude, Tjakie
    This article considers the exceptio non adimpleti contractus (defence of the unfulfilled contract / right to withhold performance of a reciprocal obligation if the other party did not make or tender proper performance). It first focuses on the role of this defence in lease contracts. The weight of South African authority is in favour of only recognising proportional reduction in rent as a remedy for a lessee who received partial use and enjoyment of the leased object, so that a right to withhold the full rent with reference to the exceptio is not available as a further defence. Nevertheless, the case of Ntshiqa v Andreas Supermarket, which applied the exceptio and the rules on the relaxation thereof in the leading case on the exceptio of BK Tooling v Scope Precision Engineering in this context, has not been specifically overruled, and has often been cited with approval by academic writers. This creates uncertainty about the lessee's exact obligations and remedies. If it is accepted that proportional reduction in rent is the appropriate remedy, rather than the exceptio, it may give the impression that the law of lease is not consistent with the general principles of contract law on remedies for breach, which recognise that the exceptio applies to all reciprocal contracts. However, there may be good policy reasons why different types of specific contracts should have their own deviating rules. This contribution shows that in this instance the rules on lease could be reconciled with the general principles. It argues for some modification of the currently accepted principles on the exceptio as well as recognition of proportionate reduction in price as a generalised remedy for breach. There is already implicit support for this modification in the cost orders made by courts who relaxed the exceptio. When rent is payable in advance, the right to suspend performance in the face of an anticipatory breach becomes relevant, and proposals are also made in this regard. The rules argued for in this contribution are consistent with a more general principle that the exceptio as well as the remedy of suspension may only be raised to the extent consistent with good faith or reasonableness. The article also comprises comparative research into Austrian and German law as well as the Principles of European Contract Law: Lease and the European Draft Common Frame of Reference.
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    The role of good faith and fairness in contract law: where do we stand in South Africa, and what can be learnt from other jurisdictions?
    (2017) Layton-McCann, Keryn; Naude, Tjakie
    Good faith is recognised as an underlying principle in South African contract law, and the contract law of many countries. There has been noticeable reluctance in some common law jurisdictions against the elevation of the role of good faith in contract law. This paper seeks to explore the tension between the Supreme Court of Appeal and the Constitutional Court in the application of good faith and by implication, fairness to South African contractual disputes. It illustrates that the Constitutional Court seeks to elevate the role of good faith while the SCA is not in favour of such an approach. As the two benches are not in step with their approach, this has led to legal uncertainty in this area of South African contract law. In South African consumer contracts, the concept of fairness is explored, and the remedies at the disposal of consumers to escape the operation of unfair contract terms in different sectors. As South Africa has only provided legislative protection for consumers in the past twenty years, this area of law is comparatively speaking 'new' when compared with other countries. There are therefore lessons to be learnt from other countries in this regard as they have the advantage of time and thereby experience gained over South Africa. For comparative purposes two common law jurisdictions were also explored, namely Australia and the United Kingdom. Both countries are facing similar challenges as South Africa to elevate and expand the role of good faith in the contractual space. Recent notable court decisions in Australia and England in the commercial contract space are explored to demonstrate these challenges. This paper also considers their consumer protection legislation in order to identify if there were lessons to be learnt from their protections that should be considered for South African legislation. Due to the EU membership by the UK, the increased recognition of good faith in civil law jurisdictions has made its way into UK legislation. Good faith as a concept has also found its way into Australian consumer legislation. It may only be a matter of time before the three countries explored in this paper elevate and expand the role of good faith and fairness beyond consumer contracts. The Constitutional mandate to develop the South African common law, the UK's (current) need to comply with civil law principles due to EU membership and generally, the conventional practice by common law legislatures, academics and courts of looking to England for legal developments, are factors which will contribute to the development.
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    Smart Contracts: A South African Perspective. A legal analysis of the possibilities and challenges posed to the recognition and enforcement of smart contracts under the South African law of contract
    (2023) Esau, Oriana; Naude, Tjakie
    The advent of electronic commerce has allowed for various transactions to be moved online. Coupled with the dawn of the Fourth Industrial Revolution and the technological progress which precipitated it, traditional modes of commercial transactions have been disrupted by the options available to actors within the marketplace when executing contracts of a commercial nature
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    The consumer's 'right to fair, reasonable and just terms' under the new consumer Protection Act in comparative perspective
    (2009) Naude, Tjakie
    The DTI and Parliament should be commended for introducing unfair contract terms legislation at last, in the form of ss 48 to 52 of the Consumer Protection Act 68 of 2008. However, more cognisance should have been taken of international best practice in this area in drafting this legislation. The problems faced by consumers which necessitate legislative protection could have been far better addressed through a number of strategies employed elsewhere. This article discusses the provisions on unfair contract terms in the Consumer Protection Act and recommends amendments to these provisions on the basis of comparative research. Courts are also urged to follow the recommendations made in this article for the interpretation of the provisions in the light of comparative research. Section 2(2)(a) of the Act specifically allows courts to have regard to relevant foreign and international law when interpreting the Act.
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    Towards augmenting the list of prohibited contract terms in the Consumer Protection Act 68 of 2008
    (2017) Naude, Tjakie
    This contribution argues for the augmentation of the list of prohibited contract terms in s 51 of the South African Consumer Protection Act, 68 of 2008, and draws on comparative research. It discusses terms which should be prohibited outright, whereas they are currently on the list of presumptively unfair terms in reg 44 of the Consumer Protection Act Regulations (the “orange list” or “grey list”). It also considers terms which should remain on the orange list.