The influence and interpretation of the Consumer Protection Act 68 of 2008 on hospital exemption clauses

Abstract

Exemption clauses are commonly used in hospital contracts to exclude the liability of the hospital or hospital personnel for personal injury or death and presented to the patient on a take-it-or-leave-it-basis. Patients usually sign these contracts containing the exemption clauses because it is impossible to negotiate the terms of the contract. Exemption clauses that are not contrary to public policy are enforceable between parties. Courts have generally favoured the application of the principles of freedom of contract and pacta sunt servanda to determine the enforceability of exemption clauses. The Consumer Protection Act, 68 of 2008 (CPA) was recently enacted, and among other things, it addresses the unfairness that is associated with exemption clauses and aims to improve consumer awareness. The common law principles were modified by the CPA. Exemption clauses, after the enactment of the CPA, are only enforceable if it complies with the requirements as set out in the Act. Exemption clauses must be drafted in plain and understandable language especially clauses that can be construed to be unfair and the risks pertaining to these clauses must also be drafted in an understandable manner. Such a clause must be brought to the patient s attention and a consumer must sign next to the clause after any term that can be interpreted as unfair terms and risks that is associated with such term is explained to him. A drafter should take into consideration greylist and blacklist terms when drafting exemption clauses, since certain clauses are prohibited and other terms are presumed to be unfair. A drafter can include a term that excludes liability for personal injury of the patient, but the hospital or its personnel will have to prove that such term is fair under the circumstances. A clause that excludes liability for death is not permissible. The enactment of the CPA was long overdue and it was vital, especially in respect of fairness of exemption clauses and the protection of patients against unfair contract terms.