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CGSO: Expiry, renewal and cancellation of fixed term agreements
- 16 October 2025
- Accounting
- South African Accounting Academy
Summary:
The Consumer Goods & Services Ombud (CGSO) has published an advisory explanatory note on the Expiry, Renewal and Cancellation of Fixed term agreements in terms of the Consumer Protection Act 68 of 2008.
Article:
Section 14 of The Consumer Protection Act 68 0f 2008 (CPA) provides a clear instruction of what is expected from a supplier prior to and after expiration of the initial contractual period. The Consumer Goods and Services Ombudsman (CGSO) has found the need to educate suppliers that compliance with the CPA is mandatory and not an option.
The CPA recognizes that a contractual relationship should not become indefinite by default, and that the consumer must have the opportunity to make informed choices prior to renewal or continuation of a fixed-term agreement.
This guidance note is to provide a simple outline on the approach that the CGSO will take in assessing complaints that relate to the expiration and renewal of fixed term agreements and the consequences of non-compliance, and sets out detail on Legal considerations.
The obligation is placed on suppliers in terms of Section 14(2)(c) to notify consumers between 40 and 80 business days prior to expiry of a contract serves as a key protective mechanism.
It ensures:
- Consumers are not passively locked into renewed terms without their express consent.
- Suppliers cannot introduce new pricing or conditions upon expiry unless these were clearly communicated within the required timeframe.
- Transparency and predictability in the commercial relationship.
Non-compliance with this provision does not only prejudice the consumer but also places the supplier in violation of the CPA, potentially exposing them to enforcement action, reputational damage, or reversal of unjust charges.
Click here to download the Advisory Note:
Relevance to Auditors, Independent Reviewers & Accountants:
- The Consumer Protection Act is yet another piece of legislation that your clients must comply with, and which you must assess compliance with. If they don’t comply with the relevant laws and regulations, you have certain reporting obligations in terms of NOCLAR (NOn-Compliance with Laws And Regulations) – this could include reporting to management, qualifying your audit opinion, reporting a Reportable Irregularity, etc.
- As an auditor, independent reviewer and accountant, you need to be aware of the latest publications, advisory notes and media releases by regulators, e.g. the CGSO.
- As a consumer, you should be aware of your rights and responsibilities in terms of the Consumer Protection Act – and what you should expect from online suppliers – especially in respect of online shopping.
- As a consumer, you also need to consider the expiration and renewal of fixed term agreements and the consequences of non-compliance.
Relevance to Your clients:
- Suppliers and consumers have a duty to comply with the Consumer Protection Act, otherwise they could be held liable.
- As a consumer, your clients also need to be aware of the latest publications by the CGSO, as well as consider the expiration and renewal of fixed term agreements and the consequences of non-compliance.