You break, you pay? Wait a minute…

In an online article in the Sunday Times, the Power Report by Megan Power, it was stated that the “you break, you pay” sign holds no sway. Most consumers can relate to having seen this sign and for that brief moment imagining what you would do if you had to break something really expensive.

The article by Megan Power relates the story of a consumer (Ms S) who accidentally knocked over a vase displayed in the décor store with her bag. The store had a sign up stating: “you break, you pay”. The salesperson informed Ms S that the broken vase formed part of a complete set and therefore was requested to pay for the entire set; one broken vase and one in a perfect condition.

Section 18(1) of the Consumer Protection Act 68 of 2008 (CPA) determines that in spite of any statement or notice to the contrary, a consumer is not responsible for any loss or damage to any goods displayed by a supplier, unless the loss or damage results from an action by the consumer, which amounts to gross negligence or recklessness, malicious behaviour or criminal conduct. The purpose of section 18(1) is substantiated by the provisions made for in section 51(1)(c) in that a supplier must not make a transaction or agreement subject to any term or condition if it purports to: (i) limit or exempt a supplier of goods or services from liability for any loss directly or indirectly attributable to the gross negligence of the supplier or any person acting for or controlled by the supplier; (ii) constitute an assumption of risk or liability by the consumer for a loss contemplated in subparagraph (i); or (iii) impose an obligation on a consumer to pay for damage to, or otherwise assume the risk of handling, any goods displayed by the supplier, except to the extent contemplated in section 18(1).

In a rather contradictory and surprising fashion, provision is made for notice to consumers in respect of certain terms and conditions in section 49 of the CPA. Contemplating that any notice to a consumer or provision which forms part of a consumer agreement that attempts to: limit in any way the risk or liability of the supplier or any other person; constitute an assumption of risk or liability on to the consumer; impose an obligation on to the consumer in order to indemnify the supplier or any other person for any cause; be an acknowledgement of any fact by the consumer, must be drawn to the attention of the consumer in the prescribed manner and form. In addition, section 49(2) of the CPA provides that, if a provision or notice concerns any activity or facility that is subject to any risk of an unusual character or nature, the presence of which the consumer could not reasonably be expected to be aware of or notice, or which an ordinarily alert consumer could not reasonably be expected to notice or contemplate in the circumstances; or that could result in serious injury or death, the supplier must specifically draw the fact, nature and potential effect of that risk to the attention of the consumer in the prescribed manner and form, to which the consumer must have assented to by signing or initialing the provision or otherwise acting in a manner consistent with acknowledgement of the notice, awareness of the risk and acceptance of the provision.

Therefore a supplier is entitled to hang up a sign within a store that limits the supplier’s risk subject to such notice having been written in plain language, the consumer’s attention having been drawn to such notice, the consumer having been given an adequate opportunity in the circumstances to receive and comprehend the notice. The term or condition contained in the section 49 notice must however not contravene section 18(1) of the CPA. For instance the sign will comply with the CPA if it read as follows: “you will be held liable for any loss or damages incurred due to your gross negligence or recklessness, malicious behaviour or criminal conduct”. Which just does not have the same ring to: “you break, you pay”. In addition, the supplier will be required to bring the sign to the consumer’s attention and provided ample opportunity for the consumer to comprehend the notice.

Bear in mind that every time one purchases an item from a supplier a contract of sale is concluded between the consumer and the supplier which is subject to the principles of common law and legislation. Ms S’ case did not meet the section 18(1) requirements for liability to pass to the consumer. Ms S was therefore incorrectly required to pay for the broken vase, Ms S was fortunately refunded on the principles of delict, after the intervention of a third party. One can however not ignore that through Ms S’ conduct by paying for the breaking of the vase as she acted in a manner consistent with a person having acknowledged her fault, then again it should be questioned whether she was aware of the dictates of section 18(1).

It must be emphasised, a delictual claim arose from the breaking of the vase (the cause of action) and had it not been for the provisions of the CPA, the supplier could have instituted legal action on a delictual basis and possibly be successful in doing so if it proved the elements of delict on a preponderance of probabilities, as the argument that a reasonable consumer would not have broken the vase could be entertained.

As far as the principles of contract law are concerned, there was no contract of sale concluded between the parties and it is therefore theoretically incorrect to say that Ms S “purchased” the broken vase due to the fact that she broke it. She simply accepted liability and paid for the damages suffered by the supplier, but was not required to do so in terms of the CPA and therefore it was appropriate of the supplier to refund her.

Section 18(1) is important in that the question whether the consumer is liable to pay for the damages caused by herself is to be answered based on this section. Therefore the test is whether the consumer was grossly negligent or acted recklessly, maliciously or with criminal intentions. In protection of this interest the supplier must therefore familiarise itself with section 18 and section 51(1)(c).


Albert Arnold