Cancellation of order for special order tools - financial difficulties: Supplier not obliged to accept cancellation (2013114179) [2014] ZACGSO 3 (4 February 2014)
- Citation
- [2014] ZACGSO 3
- Status
- Ruling
- Jurisdiction
- South Africa
- Court
- Consumer Goods and Services Ombud
- Panel
- Bonita Hughes
- Case number
- 2013114179
More details
- Court
- Consumer Goods and Services Ombud
- Panel
- Bonita Hughes
- Case number
- 2013114179
On this page
Professional case brief
Research organized from the available case record
01
Holding and result
The Ombud found that the tools ordered by the complainant constituted a special order as defined in the Consumer Protection Act. Section 17 does not entitle a consumer to cancel a contract for special-order goods, and the supplier is not legally obliged to accept cancellation or refund the deposit. The contract between the parties was valid and binding, and the supplier had already incurred costs to import the goods. There is no legal basis for instructing the supplier to cancel the agreement or refund the deposit.
Court disposition
Complaint dismissed; no recommendation in favour of the complainant.
Orders
- The supplier is not obliged to refund the deposit of R17,000.00.
- The contract remains valid and binding between the parties.
02
Material facts
Parties
Complainant
ApplicantSupplier (E)
RespondentAmounts and remedies
- Deposit Paid: ZAR 17,000
- Total Price of Tools: ZAR 85,000
03
Procedural history
Posture
Consumer Complaint / Final Determination
04
Questions and positions
Legal issues
- 01
Whether the complainant is entitled to cancel the contract for special order tools due to financial difficulties.
- 02
Whether the supplier is obliged to refund the deposit paid by the complainant.
- 03
Whether section 17 of the Consumer Protection Act applies to special order goods in this context.
Party arguments
- Applicant
- The complainant paid a deposit of R17,000.00 for a set of tools but, due to financial constraints, sought to cancel the order and requested a refund. The complainant contends that the supplier should refund the deposit as the goods were not yet delivered.
- Respondent
- The supplier asserts that the tools were a special order, imported from Australia upon receipt of the deposit, and that the contract stipulates no refunds. The supplier maintains that the complainant is obliged to pay the outstanding balance and that cancellation is not permitted under the contract or their policy.
05
Court’s reasoning
Legal principles
- 01
Consumer Protection Act, Section 17
Section 17 of the Consumer Protection Act allows a consumer to cancel an advanced order, subject to a reasonable cancellation charge, unless the goods are special-order items procured or created specifically for the consumer.
06
Ratio, limits and disposition
Ratio decidendi
The Ombud found that the tools ordered by the complainant constituted a special order as defined in the Consumer Protection Act. Section 17 does not entitle a consumer to cancel a contract for special-order goods, and the supplier is not legally obliged to accept cancellation or refund the deposit. The contract between the parties was valid and binding, and the supplier had already incurred costs to import the goods. There is no legal basis for instructing the supplier to cancel the agreement or refund the deposit.
Obiter and limits
- The absence of a refund policy by the supplier further supports the refusal to cancel the contract.
- Principles of reasonableness and fairness do not override the statutory exclusion for special-order goods.
Court disposition
Complaint dismissed; no recommendation in favour of the complainant.
- The supplier is not obliged to refund the deposit of R17,000.00.
- The contract remains valid and binding between the parties.
Source and reliance status
Consumer Goods and Services Ombud
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Judgment reading view
Judgment text
The complete available source text.
Consumer Goods and Services Ombud
Ruling
Cancellation of order for special order tools- financial difficulties:
Supplier not obliged to accept cancellation
Complaint ref :
2013114179
Adjudicator :
Bonita Hughes
Date :
04 February 2014
1. Summary of your complaint
In September 2011 you paid a deposit of R17 000.00 for a set of tools. In April 2012 you informed the supplier that due to financial constraints you can no longer afford the tools.
You cancelled the deal and requested a refund. The supplier informed you of their no refund clause.
You want the supplier to refund you the deposit of R17 000.00.
2. Summary of E’s response
The supplier advised that you ordered a set of metal bending tools on 18 September 2011. The price at the time was R85 000.00 and a deposit of 20% was required for the tools to be ordered.
You paid R9 000.00 on 18 September 2011 and the balance of the deposit a month later on 15 October 2011.
The contract states that the outstanding balance will be paid within 4 weeks from the date of signature. Based on this E imported the full set of tools from Australia, paying all the charges upfront.
In 2012 you requested a refund and E advised that they do not have refund policy and that you have to pay the outstanding balance.
The supplier advised that in accordance with the terms of the contract signed they will not concede to your request for a refund.
3. Assessment
We have considered all the evidence presented by both you and the supplier and advise as follows:
You would like to cancel your order for a set of metal bending tools and request that the supplier refund your deposit of R17 000.00.
In this regard we would like to refer you to section 17 of the Consumer Protection Act:
A consumer may in spite of any term to the contrary, cancel an advanced order in terms of section 17(2) of the Consumer Protection Act, subject to the imposition of a reasonable charge for cancellation for the order (section 17(3)(b)), UNLESS the goods were a special-order (section 17(1)), i.e. the supplier expressly or implicitly was required or expected to procure, create or alter specifically the goods to satisfy the consumer’s requirements (definition section).
In this instance it appears that the tools were a special order and you will therefore not be able to cancel the order in terms of Section 17 of the Consumer protection Act.
According to the supplier they also do not have a refund policy and we can therefore not instruct them to cancel the contract.
You entered into a valid and binding agreement and there in no legal basis upon which we can instruct the supplier to cancel the
agreement.
4. Conclusion
Based on the facts of this case, the information and evidence furnished to this office and on the principles of reasonableness and fairness, there is no reasonable prospect of this office making a recommendation in your favour.
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