Comparison of Consumer Protection Laws in Germany and South Africa
This is the transcript of a presentation held by German attorney Christopher Richter before attorneys in South Africa.
Dear Colleagues, honored attorneys,
I want to give you a brief overview of the German consumer protection law and compare the German and South African law. In the main part of my presentation I will highlight two aspects in more detail: The problem of ordering goods over the Internet and the resignation in the context of sales contracts with only small defects. Due to time constraints, the problem with the sending of unsolicited goods is left for home reading.
I. Comparison of the South African and German law
Under German law, unlike South African law, there is no separate "Consumer Protection Act," which would regulate all aspects of consumer law. You can find legal norms, which serve mainly or "passing" objectives of consumer protection, in very many individual laws. With the right design the German legislation is even stricter than the requirements that are imposed by the European Union through a number of guidelines, to protect the vulnerable consumers, because these are structurally inferior than the providers of products and services.
The consensus is that consumers must take decisions largely depend on information that is transparent to consumers ("informed consumer"). In South African law, you find this objective in Chapter 1, Part B, number 4, paragraph 3 to 5. Courts will go out with unclear rules of the interpretation, that is worst for the consumer.
In the German Civil Code (BGB) the focus of consumer protection law is on the rules on doorstep selling (§ § 312, 312a), distance contracts (§ § 312b to 312d), contracts in electronic commerce (§ 312e), the sale of goods (§ § 474-479), part-time Timeshare contracts (§ § 481-487), the consumer loan contract (§ § 491-498), providing financing support between an entrepreneur and a consumer (§ § 499-504) and rates of delivery (§505) Many acts are also motivated by the formal requirements of consumer protection, such as the need to attest a land purchase contract by a notary (§ 311b I BGB). In addition, there excist laws with formal requirements, such as the text for teaching the consumer about the existing oft withdrawal with certain types of contracts (consumer loans, part-time-share contracts) or distribution channels (such as doorstep selling, distance selling contracts).
For South African lawyers is now a good earning potential, to create separate contracts for entrepreneurs, which they then use to consumers and to businesses. Of course, you have to note the specifications of the 48 - 52 of the Consumer Protection Laws here. Address to the problem of how the German courts deal with a consumer, posing as a businessman, is beyond the scope of work. I also leave open the question, if the consumer protection law must reduced teleological for an attorney in account of his educational background. However, for attorneys exist now a broad field of reasoning. In Germany, the highest courts often meet unexpected and far-reaching decisions.
II. Orders over the Internet
The German Distance Selling Act deals with the special rules for the distribution of goods and services from businesses to consumers, without direct contact between the parties. Since the first January 2002 the consumers have basically a right of withdrawal. Within a period of two weeks, the consumer may revoke his declaration of intent without giving any reason and is no longer bound by the contract. This period begins when the contractor has fulfilled its obligations of information in text form. The writing is already met on the Internet, if the employer provides the instruction for downloading and printing. If goods are delivered, the period begins when the consumer has received the merchandise.
You find simular regulations In South African law, in the Electronic Communications and Transactions Act, governed from 2002. But here the withdrawal period is only seven days and a cancellation is not provided. According the wording of Act II in 42 (f) (i) it is unclear, what is required so that a product is manufactured as an individual and therefore the right of withdrawal is excluded. Consumers and entrepreneurs will naturally have different views here. The attorney will represent the most advantageous position for his client, of course.
A major point of contention among German lawyers, the European Court of Justice on 15 April 2010 ruled in favor of the consumer, namely that the imposition of the costs of sending the goods to the consumer in the event of the withdrawal is contrary to the objective of German consumer protection law. In the South African Consumer Protection Law No. 17 paragraph 4 and No. 20, paragraph 6 oppose such a fee, that now could be applied next to No. 44 of Electronic Communications and Transactions Act because of the reference back in paragraph IV.
III. Repudiation with only small defects
The resignation of the German law of obligations leads to a reversal of the contract, so that services received must be refunded (§ 346 Abs 1 BGB) and as yet unfulfilled claims expire (quite devastating objection). A repudation under German law is only in exceptional cases possible, because contracts are generally observed as agreed.
Systematically distinguish the reasons for repudiation according to whether the performance is still possible or impossible, perhaps due to the matter it was destroyed. Previously, the consumer must always set a grace period to allow the contractor to fulfill yet (priority of remedy). The South African law governs in No. 56, paragraph II (b) CPA, the consumer may repudiate easily under full purchase price refund within the first six months after the purchase, when there is a material defect. After this period the consumer can repudiate only in accordance with No. 54 Abs . II CPA. Denied the contractor's subsequent performance, in a number of cases, the buyer's right of rescission in Germany is still excluded. This is especially the case when the defect is irrelevant.
In South African law the relevance of the defect is not a requirement for a repudiation. In order not to burden the contractor unduly economically, is to consider a teleological reduction of the law. This seems reasonable in the light, because the entrepreneur, who is once doing a bad job, is not protected by the right to make remedy in the first six months after the transfer.
Whether a breach is significant, based on German law, can be decided after a comprehensive consideration of interests. After that on the one hand, the expenditure is taken into account, that would be required for a remedy. The limit of significance is drawn from the prevailing opinion mainly between 10% and 20% of the purchase price. It is not yet clarified by the German highest court until what point is an insignificant breach of duty on a car purchase, for example. This is important especially for the question of whether the buyer may declare the repudiation of the contract. The courts have also disagreed over, whether the consumer has to compare schematically only the relationship between defect removal costs and purchase price. It is therefore aus anwaltlicher Vorsicht considering as a second step, what impact has the breach of duty to the affected performance and how large are the numbers of defects. The overall circumstances of the case are important. A minor defect may arise in particular when it disappears in less time by themselves or can be easily corrected (eg temporary moisture in the purchased house or defective light bulb in the purchased car).
Long not all disputes are resolved. The German Highest Civil Court has yet made one or the other surprising decision. In February 2010 for instance, he decided, that the delivery of a motor vehicle in another than the ordered color normally is a significant defect and thus a significant breach of duty, even if the buyer has initially considered a different car color. In May 2007 the German Highest Civil Court clarified that a vehicle with increased consumption of gas was deficient, but the resignation was excluded, because the consumption was below 10%.
In June 2011 the Highest Civil Court reaffirmed its earlier rulings, that defects whose removal expenses just under one percent of the purchase price, are classified as insignificant and therefore do not justify a rescission of the contract. This also applies to a vehicle of 'luxury'. The other circumstances of the case, could have no influence, because the lack was wether non-recoverable or eliminated with high costs, nor there was a lack of unclear reason at the time of the resignation statement. Also irrelevant was, that the entrepreneur has already reworked several times.before the declaration of repudiation The relevance of an existing defect had nothing to do with the extent to which the seller has previously eliminated other defects.
IV. Unsolicited goods
Through the delivery of unsolicited goods or the provision of other services of an entrepreneur unsolicited to a consumer claim are not justified. This is clear because of § 241a paragraph 1 of the Civil Code (BGB) since January 2002. In South African law, this follows from No. 21, paragraph VII Comsumer Protection Act.
Who under German law is not taking any steps to such a mailing, is not even obligated to do. This applies even if the shipper declares the contract applies to non-refoulement or non-rejection within a certain period as closed. The contract comes into existence only if the recipient expressly declared to accept or to pay. The recipient does not need to return the thing, not even at the expense of the shipper. He must not even keep them. He is not the owner - this is different in accordance with South African law. No. 21 VI (A) - but can use the right from the start and consume without legal consequences. Even not the intentional damage or sale is punishable. Because the property remains in Germany as a weak right further to the sender, so damages claim because of interference by third parties are conceivable against these persons. In South Africa such claims are only conceivable within the time limits set in paragraph 2.
If the consumer sends the unsolicited goods back, he can demand the cost to replace recording to the two legal systems, see Section V (B); § 241 BGB.
Note, however: If a delivery error happened and the consumer has recognized the mistake or could have seen it (wrong address), he cannot claim to own an unsolicited goods, see Section II (B) CPA. So was the delivery to the consumer recognizable by the recipient or has the sender erroneously assumed by an order of the shipper, the shipper may return and may require compensation. The consumer is in consequence of delivering with unsolicited goods not obliged to do anything, he may retain or dispose them. However, if the consumer pays the unsolicited good, this is regarded in Germany as acceptance of the contract.
Under German law is debatable whether it is possible for a consumer in a business relationship to a shipper, then he received accidentally a delivery of higher quality goods, and despite complaints of suppliers , to keep the goods, under reference to the current legal situation of unsolicited goods. It is argued that the consumer is denied this in good faith. In South African law, the same dispute can occur due to the unclear wording in paragraph IB (I).
Each case is individual and depends on the facts to be assessed. To determine the 'real' situation, it requires a detailed and thorough study and acts of gathering all relevant information. This presentation is not intended to examine comprehensively the entire consumer protection law, nor can he give final and definitive answer to the presented issues in dispute. The goal is to encourage the audience to think and encourage them to act creatively for the benefit of their clients use. Thank you for your attention.