Takealot’s “fake price” defence examined

The Advertising Standards Authority of South Africa (ASA) recently found Takealot guilty of selling products at higher prices than what it advertised the goods for.

During the ASA investigation, Takealot claimed it was “not responsible for advertising appearing on third-party platforms”.

According to the ASA complaint, Takealot said “its terms and conditions exempt it from liability emanating from its own advertising”.

Many consumers were unhappy with Takealot’s response, arguing that the company should honour its advertised prices.

MyBroadband approached an expert regarding consumer rights in South Africa – Rosalind Lake, director at Norton Rose Fulbright – to shed light on the matter.

Lake told MyBroadband that the supplier – Takealot – is bound to supply a consumer at the price it advertises.

This is unless it is an obvious and inadvertent error and the supplier takes reasonable steps to inform the consumer of the error before the purchase takes place.

“To not be bound by the price published incorrectly, they must inform consumers of the error and correct the price as soon as it comes to their attention,” said Lake.

However, when third parties advertise products on the Takealot website, the same rule does not hold.

“Requiring Takealot to be liable for errors in that advertising would be akin to holding a newspaper or magazine responsible for errors in advertising placed by third parties,” said Lake.

Takealot’s terms and conditions

In its terms and conditions, Takealot indemnifies itself against many liabilities, listed below.

Limitation of liability

Takealot cannot be held liable for any inaccurate information published on the Website and/or any incorrect prices displayed on the Website, save where such liability arises from the gross negligence or wilful misconduct of Takealot, its employees, agents or authorised representatives. You are encouraged to contact us to report any possible malfunctions or errors by way of our Help page.

Takealot shall not be liable for any direct, indirect, incidental, special or consequential loss or damages which might arise from your use of, or reliance upon, the website or the content contained in the website; or your inability to use the website, and/or unlawful activity on the website and/or any linked third party website.

You hereby indemnify Takealot against any loss, claim or damage which may be suffered by yourself or any third party arising in any way from your use of this website and/or any linked third party website.

Lake said regardless of what is contained in Takealot’s terms and conditions, if its advertising or website content misleads consumers, it could be found to have contravened the Consumer Protection Act (CPA).

“Takealot cannot rely on the clauses in the terms and conditions to get out of a complaint of contravening the CPA – but it could be relied on to limit any claim by the consumer,” she said.

In Lake’s view, Takealot’s terms and conditions comply with the requirements of the CPA, for the most part.

“It still remains the consumer’s responsibility to read terms and conditions and to understand the basis on which they are entering into a transaction and what legal claims they may be giving up.”

“It is clear from a review of Takealot’s terms and conditions that they have gone to some effort to consider their business model along with the requirements of the CPA and have made their terms and conditions understandable (for the most part).”

Now read: Takealot guilty of “fake” prices

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Takealot’s “fake price” defence examined