The CPA “Not Applicable” Clause: When and Why to Exclude the Consumer Protection Act

Not every seller is a “supplier” for purposes of the Consumer Protection Act. Where they're not, the Act simply doesn't apply to the transaction, but only if the OTP says so properly. This instalment covers what that clause needs to do, and why it matters beyond the sale agreement itself.

Why the CPA doesn't automatically apply

The CPA governs transactions where goods or services are supplied in the ordinary course of business. A private individual selling their own home, once, is not “in the business” of selling property. When that's genuinely the case, the Act doesn't apply to the sale, and neither party is bound by its protections or obligations for that transaction.

The problem is that this only holds if it's true and it's recorded. A seller who sells property regularly, whether through a trust, a development, or repeat investment sales, is a different case entirely, and the clause shouldn't be dropped in as boilerplate without checking.

The warranty has to be specific

The clause needs the seller to warrant, to both the purchaser and the property practitioner, two distinct things: that they're not engaged in selling immovable property on an ongoing basis, and that this particular property isn't being sold in the ordinary course of their business. Both elements matter. A seller could technically not be a full-time property dealer and still be selling this specific property as part of a business activity, so the clause needs to cover both bases, not just one.

Make sure both parties understand what they're agreeing to

It's not enough for the warranty to exist. The clause should also record that both the seller and purchaser understand what the warranty means in practice, namely that the CPA doesn't govern their relationship under this agreement. This matters if a dispute later ends up in front of the Consumer Tribunal or a court asking whether the parties turned their minds to the exclusion, or just signed a standard template without reading it.

Don't forget the National Opt-Out Register

This is the part that gets missed most often. Even where the CPA itself doesn't apply, the parties may still be registered on the National Opt-Out Register, which restricts unsolicited direct marketing communications generally. Without a clause addressing this, a strict reading could catch routine transactional messages between the practitioner, the conveyancer, the bond originator, and everyone else involved in getting the deal to registration.

The fix is to have both parties expressly consent to receiving communications that are reasonably necessary for negotiating, concluding, implementing, administering, and fulfilling the agreement, and to extend that consent to every party actually involved: the property practitioner, conveyancing and bond attorneys, bond originators, financial institutions, insurers, compliance providers, valuers, municipalities, managing agents, and other service providers.

Classify the communications correctly

Finally, the clause should state plainly that these communications are transactional and service-related, not direct marketing, and that they don't fall foul of the CPA or the Opt-Out Register on that basis. This is what protects everyone in the transaction chain, not just the seller, from a technical non-compliance argument over something as routine as a bond originator following up on documentation.

Final thoughts

This clause does two separate jobs: it correctly excludes the CPA where that's factually true, and it keeps ordinary transactional communication lawful regardless of the parties' Opt-Out Register status. Skip either half, and you've either misapplied a warranty that wasn't true, or left the whole transaction chain exposed to an avoidable compliance dispute.

Example clause

CONSUMER PROTECTION ACT NOT APPLICABLE

The SELLER warrants to both the PURCHASER and the PROPERTY PRACTITIONER that he/she is not engaged in the sale of immovable PROPERTY on an on-going basis and that the PROPERTY is not being sold in the ordinary course of the SELLER's business.

The SELLER and PURCHASER are aware that the SELLER's warranty in clause 21.1 means that the Consumer Protection Act 68 of 2008 does not apply to the sale agreement that comes into existence upon acceptance of this offer and that the relationship between the parties is not governed by the said Act.

Notwithstanding any registration by the SELLER or the PURCHASER on the National Opt-Out Register established in terms of the Consumer Protection Act 68 of 2008 and the regulations promulgated thereunder, the SELLER and the PURCHASER expressly consent to receiving communications that are reasonably necessary for the negotiation, conclusion, implementation, administration and fulfilment of this Agreement.

Such consent shall extend to communications from the PROPERTY PRACTITIONER, the conveyancing attorneys, bond attorneys, bond originators, financial institutions, insurers, compliance service providers, valuers, municipalities, managing agents, service providers and any other person or entity directly involved in facilitating or giving effect to this transaction.

The SELLER and the PURCHASER acknowledge and agree that such communications are transactional and service-related in nature and are necessary for the performance of this Agreement and shall not be regarded as prohibited direct marketing for the purposes of the Consumer Protection Act or any registration on the National Opt-Out Register.