CPA Section 14 (Fixed-Term Consumer Agreements)
Also known as: Fixed-Term Agreement Rule, Section 14 Notice.
What is CPA Section 14?
Section 14 of the Consumer Protection Act governs fixed-term consumer agreements. It caps the maximum term at 24 months (extendable only with demonstrable benefit), requires 20 business days' notice of expiry, permits early cancellation on 20 business days' notice subject to a reasonable cancellation penalty, and mandates automatic month-to-month continuation after expiry.
Drafted and reviewed by
Attorney & Founder, My-Contracts.co.za · Legal Practice Council of South Africa (LPC F17333)
Definition and context
Section 14 of the Consumer Protection Act 68 of 2008 is the consumer-protection cornerstone for subscription businesses, gym memberships, service-contract lock-ins, internet and cellular plans, and ongoing supply arrangements. It applies to every fixed-term agreement between a supplier and a consumer who is a natural person. It does not apply to juristic-person consumers (Regulation 5 of GN 293 of 1 April 2011) or to transactions already regulated under the NCA, FAIS or FAIS-related laws.
The section sets five substantive rights: (i) a maximum term of 24 months, unless a longer term is expressly agreed and the supplier shows a demonstrable financial benefit to the consumer; (ii) the right to cancel on 20 business days\' written notice, subject to a reasonable cancellation penalty under Regulation 5(2)–(3); (iii) an obligation on the supplier to notify the consumer of the imminent end date in writing 40 to 80 business days before expiry, in plain and understandable language, including the changes that would apply on renewal; (iv) automatic continuation on a month-to-month basis after expiry, unless the consumer expressly directs otherwise or agrees to a new fixed term; and (v) an express prohibition on "evergreen" clauses that automatically re-lock the consumer without notice.
Case law and enforcement: in Consumer Goods & Services Ombud rulings on cell contracts (2021–2024) and National Consumer Commission investigations into gym chains, the reasonable-cancellation-penalty factor has been reduced to a defined formula: remaining subscription value, minus new-customer acquisition cost, minus any discount that was the quid pro quo for the fixed term. A penalty that recovers all future subscriptions is unreasonable and unenforceable.
Where this term lives in law
Consumer Protection Act 68 of 2008
Sections: 14, 48, 51
Protects consumer rights in transactions for goods and services within South Africa.
Frequently asked questions
What is the maximum length of a fixed-term consumer agreement in South Africa?
Section 14 and Regulation 5 cap fixed-term consumer agreements at 24 months. Longer terms are only enforceable if expressly agreed in writing and the supplier shows the consumer obtains a demonstrable financial benefit from the longer duration.
Can a consumer cancel a fixed-term contract early?
Yes. Section 14(2)(b) gives the consumer the right to cancel on 20 business days' written notice. The supplier may recover a reasonable cancellation penalty determined under Regulation 5(3) — remaining subscription value less acquisition costs and any discount given for the lock-in.
Must the supplier notify the consumer before the contract ends?
Yes. Section 14(2)(c) requires the supplier to notify the consumer in writing between 40 and 80 business days before expiry, in plain language, of the coming end date and any material changes that would apply on renewal. Failure results in automatic month-to-month continuation on the same terms.
Does section 14 apply to business customers?
No. Regulation 5 limits section 14 to natural-person consumers. Juristic consumers below the R2 million threshold retain most CPA protections but not the fixed-term-specific rights in section 14.
Contract templates using this term
3 templates reference CPA Section 14 (Fixed-Term Consumer Agreements).