Abstract
This study critically evaluates the purpose, application, and impact of limitation of liability provisions commonly found in standard form contracts. Suppliers use limitation of liability clauses to free and protect themselves from potential liabilities arising from a contract with a consumer. Limitations of liability clauses that do not violate public policy principles are treated as valid and enforceable in our law and our courts consider the common law principles of freedom of contract and pacta sunt servanda when determining the validity and enforceability of a supplier’s liability-limiting clause. The Consumer Protection Act 68 of 2008 has strengthened consumer protection against the inclusion of unfair, unreasonable, and unjust contractual clauses. Among other things, the Act requires that contractual clauses be written in plain and understandable language that is readily accessible to consumers. Regulation 44(3) to the Consumer Protection Act provides a list of unfair terms to protect consumers’ positions in consumer contracts.
This study assesses the validity of warranty, indemnity, and exemption clauses from a South African perspective and offers practical guidelines for ensuring their validity in interpretation. It also identifies shortcomings in contemporary legislation and proposes solutions with the aim of ensuring better consumer protection and consistency with constitutional values.
Keywords: Exemption clauses; Warranties; Indemnity clauses; Limitation of liability