Sunday, May 26, 2024

Ignorantia juris non excusat…

A contract is a written or spoken agreement between two or more parties, on issues such as employment, sales, service provision or tenancy. It is intended to be enforceable by law. The sad reality is that despite its gravity, people continue to sign or agree to contracts without comprehension which presents serious repercussions.  

Customers or consumers often find themselves caught in between a rock and hard place as a result of contracts that are signed under ignorance or duress (under undue influence).The popular adage “A contract is as good as people signing it” cements this. The fact of the matter is that contracts are binding. Signing contracts without understanding or comprehending them has adverse ripple effects that range from breaches and violations. This often leads to endless conflicts and civil cases (law suits). Contracts are signed everyday from bank loans, insurance policies, tenancy and even lease agreements among others.
On the other hand some parties deliberately or cunningly design contracts in such a way that they swindle their unsuspecting victims. Some businesses especially financial institutions (e.g banks and cash loans) draft contracts in such a way that consumers do not understand them. Due to the consumers’ desperation to acquire services such as loans, they (customers) end up signing contracts without understanding the contents.  These institutions do not even make much effort to explain much or advise the consumers on those contracts.
Some financial organizations would normally use jargon or technical language in their written agreements (Contracts). Even some of the writing in the contracts is illegible making it difficult for customers to read the contracts. Sadly the customers end up giving in and signing the contracts merely because they seek services or goods.
Generally a contract should have the following to be valid; It must be a legitimate offer, consideration, capacity, intention, formalities, mutuality of obligation and legal purpose. A contract should also be lawful. If the contract does not meet the above requirements it becomes void or nullified. In other words it is non-existent. A void contract becomes nullified from the time it was created and each of the parties is not bound by its terms. It can be void because the terms in the agreement are illegal or against public policy. It can also be void if one of the party was not of sound mind when signing such a contract (signing the contract under duress).
Like any other country around the world, Botswana is not immune to contractual conflicts or problems. In fact many people fall victim to contracts that lead to endless court cases because they sign contracts without understanding them or merely because they were tricked into signing such contracts. There is also a trend where some businesses deliberately deny consumers or clients’ receipts. A receipt forms part of an agreement or contract. It is used by clients or customers when they seek redress lodging complaints against goods or services. 

Richard Harriman of the famous Consumer Watchdog says that his office is inundated with complaints from consumers who have made the mistake of either signing a contract without reading it first or who did not know what they were signing for. 
I suspect the root problem is that suppliers do not adequately explain contracts to customers before they sign them or sometimes they deliberately try to prevent customers from reading and understanding the contracts they sign. I think some suppliers know that if their customers genuinely understand what the agreement said they wouldn’t sign them,” says Harriman. 

Consumer Watchdog is a local non-profit making organization that deals with free consumer or customer advocacy. It has over the years campaigned for changes to consumer protections laws and often helps to educate consumers on their rights and responsibilities. The organization has been operating since 2005.
Touching on financial institutions such as banks, Harriman said he does not believe these institutions deliberately try to cheat customers with their contracts. He is of the view that they are simply negligent by not explaining the contracts adequately. He said it is made worse by the fact that these agreements often include a language that the average customer simply does not understand.
“Also the contracts are so long and difficult to understand that many people give up trying to understand them,” he said.
On a positive note he said Consumer Watchdog has been educating consumers on their rights for 15 years and much of this has related to understanding agreements that consumers sign. Harriman also said they have also been doing their best to encourage suppliers to make their agreements as simple as possible so as many consumers can understand them.

We are aware that many suppliers fail to offer receipts. However, this will hopefully end with the introduction of the new Consumer Protection Act which makes offering receipts compulsory “adds Harriman. 

A Gaborone based lawyer who prefers hiding his identity says people should learn to engage lawyers when drawing agreements (contracts) especially when they have to part with substantial amounts of money.

Never think your agreement is too simple to require the services of a lawyer. The police have no business in your agreements. Deputy Sheriffs will refer you to lawyers because their work is to help enforce judgments not agreements,” says the lawyer. 

He adds that having judgment in one’s favour or against them means that they would have gone through that scary and expensive process in court called litigation where everything about an agreement might be tested(including its validity). He said if an agreement or contract is drafted by an expert one will have no difficulty defending its terms. 

The lawyer further says if one does it themselves, more often it becomes difficult for one to prove that they made for an example; a payment to the other party.

The Acting Permanent Secretary in the Ministry of Investment, Trade and Industry Keganele Malikongwa confirmed that they have a wide range of complaints regarding contracts.

“We are aware of the issues raised through the various complaints reported to our offices regarding contracts throughout the country. Consumers come in person to lodge complaints, while some are reported through tip offs or online. Furthermore businesses are expected to issue receipts while consumers are supposed to keep their receipts safe as proof of payment in case a complaint arises,” she said.

Malikongwa said they conduct public awareness programmes to make consumers aware of their rights and responsibilities through Kgotla meetings, workshops, open air campaigns and for businesses to be aware of the requirements of law through business workshops, broadcast media, social media and print media. Furthermore she said perpetual non compliant businesses are engaged individually to advise them to comply failing which such businesses can have their operating licenses reviewed.

“The office conducts routine business inspections to ensure compliance to various trading standards. These inspections may at times involve stakeholder collaboration with bodies like Banks, Ombudsman, Non- Bank Financial Institutions Regulatory Authority (NBFRA), Botswana Unified Revenue Services (BURS), Botswana Police Services and Bank of Botswana. During such inspections, the office assesses contracts and advices businesses accordingly,” she said.

On what the government does to solve contract issues, she said they conduct mediation through which the parties come to an agreement on how to resolve a complaint.

Malikongwa said where the office fails to bring the parties to resolve the case, they would then refer the matter to the courts of law. She revealed that the complaints resolution time is 30 days. She however said there are cases which go beyond the stipulated turnaround time especially when there is a requirement of expert advice from other ministries.

Asked to give statistics she said “Our system categorizes complaints according to class or category of commodity such as vehicles, cell phones, electronics, furniture, clothing and miscellaneous. Each of these comprises an element of unfair contractual term. In the year 2018/ 2019, the office received 1423 complaints. 94 percent were resolved of which 84 percent were resolved within the 30 days. She further said that the Competition Act of 2018 establishes  the Competition and Consumer Authority to implement both the Consumer Protection Act 2018 and Competition Act 2018.

“It further establishes a Competition and Consumer Tribunal which will be responsible for adjudication over any matter brought before a tribunal by the Competition and Consumer Authority. The Ministry has commenced activities that are geared towards implementation of the two Acts such as appointment of the governing board for the Authority and members of the Tribunal,” Malikongwa said in conclusion.


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