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Indemnities and the ‘7 Tiers of Protection’ (Part 4)

Photo by Craig Whitehead on Unsplash

I promised you a further discussion of TIER #6: Indemnities and signage, so here we go. 

 

I’ve mentioned the impact of the Consumer Protection Act, Act 68 of 2008 ('CPA') on indemnities, disclaimers and waivers (‘Indemnities’). This insert will address in detail what you need to do ensure your Indemnities are carefully drafted, CPA compliant and enforceable.

 

Lots of articles have been written in this regard and by definition most are quite lengthy but here are some succinct guidelines (CPA section in brackets):         

  • Use plain language (22) – make sure it is understandable to a layman something which is somewhat of a challenge to the legal fraternity! The CPA prescribes the following standard: ’a consumer with average literacy skills and minimal experience as a consumer of the relevant goods or services’
  • Discuss key elements of the booking (Such as cancellations and non-refundable deposits) and ensure the client understands the content and implications (41). This can be impractical so one way of doing that is twofold: have a summary at the bottom of the booking form and have a well drafted, practical Q&A section in your website. You are specifically required to avoid (a) ‘false, misleading or deceptive .. representation’; (b)‘use exaggeration, innuendo or ambiguity as to a material fact’; (c)‘fail to disclose a material fact’ and (d)‘fail to correct an apparent misapprehension on the part of a consumer’  when it amounts to any of the aforesaid.
  • The same applies to all and especially unusual risks to, from departure/return and during the journey/event (41) 
  • Ensure the wording is not unreasonable, misleading or deceptive (48 read with regulation 45). This applies to your terms and conditions and the Indemnity. It will be deemed to be is ‘unfair, unreasonable or unjust’ if it fails one of the following tests: (a) ‘excessively one-sided in favour of any person other than the consumer’; (b) ‘so adverse to the consumer as to be inequitable’; (c) ‘the consumer relied upon a false, misleading or deceptive representation’.It is important to note that the Indemnity per se is not automatically unenforceable. 
  • The following must be drawn to the attention of the client and explained at the earliest possible opportunity and in a ‘conspicuous’ manner (49) namely conditionsthat: (a) Require the client to indemnify the supplier; (b) Limit the liability of the suppler; (c) Require assumption of risk or liability by the client. The same applies to risks (a) ‘of an unusual character or nature’; (b) that are ‘not reasonably expected’; (c) that ‘can result in serious injury or death’ ‘ 
  • The timeframe of the advisory obligation contained in section 49 i.e. ‘earliest possible opportunity’ is very important i.e. it must be ‘the earlier of the following’: the client entering into the agreement; engages in the activity; enters the premises or makes payment.
  • Note that gross negligence may not be excluded or conversely you cannot limit your liability to gross negligence (51)       
  • The indemnity should cover all harm e.g. death, injury, illness, loss of or damage to property, economic, indirect or consequential loss or damage and emergency medical treatment 
  • Note that the aforesaid arising from defective product/goods or inadequate instructions (e.g. use of a quad bike) cannot be indemnified against as the liability is absolute and no negligence is required (61) 
  • Even if you are not the supplier but arrange the availability of or access to such goods as part of your service, you can be liable as above as you are deemed to be the supplier (61.3)

 

An indemnity itself is not enough and it should go hand in hand amongst others with a proper booking procedure, detailed terms and conditions, comprehensive risk identification and management, staff training and vetting/only using reputable suppliers and adequate insurance cover.      

 

Copyright Adv Louis Nel

t/a louis-THE-lawyer

December 01 2021

 

 DISCLAIMER - Each case depends on its own facts & merits - the above does not constitute advice - independent advice should be obtained in all instances

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