Acts and MLM

Online Contracting:

 - Electronic Communications and Trasactions Act 2002.

Some definitions:

1. Supplier - is any person who offers goods or services for sale, hire or exchange on the web. (Definition of supplier can be different in different acts.) ie: It must be someone who sells goods or services on the web in the ordinary course of business

2. Consumer - any natural person, so not a company or other juristic entity, who enters into a transaction with a supplier. (Note: The act does not apply to juristic personsie. juristic persons are not protected by the act.)

NB!!! most important part is the consumers rights in terms of section 44 (must know this section).

Consumers Rights:

1. entitled to a "cooling off period" - during which he/she can cancel the transaction without any valid reason in law and without incuring any penalty.

• In an electronic contract for the supply of goods he can cancel within 7 days of receiving the goods.

• In a contract for the supply of services, can cancel within 7 days after the conclusion of the contract.

• If the consumer has already paid for the goods and services, he is entitled a full refund within 30 days of cancellation.

• Do not aply to the following transactions: 1. Financial services (includes insurance) 2. auctions 3. transactions for the supply of food, beverages and other consumerables. 4. transactions where the price of goods are dependent on financial market fluctuations (listed shares etc.) 5. Transactions where the goods are made to the customer specification/ personalised. 6. Audio or video recordings/ computer software have been unsealed by the consumer. 7. The sale of newspapers, periodicals, magazines and books. 8. Transactions which provide for online gaming and lottery servicess. 9. transactions with the provision of accommodation, transport, cateringor leisure services. 10. Transactions for the supply of services which have already begun before the end of the 7 day cooling off services.

Opportunity to review the transaction:

The supplier must give the consumer the opportunity to review the entire transaction before he places his order. OR the opportunity to completely withdraw from the transaction.


The supplier must use a payment system which sufficiently secure. If the system is not sufficiently secure, then the supplier is liable to the consumer for any damage.

Performance by the supplier:

The supplier must perform the order within 30 days of receiving it unless otherwise agreed. If the supplier does not perform within 30 days or the agreed period, then the consumer can cancel and get their money back.

Contractual exclusion not allowed:

Any term in an online contract which attempts to exclude any of the rights discussed is null and void even if the consumer agreed to it.

d) Factors which can taint or prevent the conclusion of a valid contract :




undue influence

These may either render a contract void or voidable.

This article was published on 17.12.2015 by Network Marketing Assistance
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