SCA endorses CPA-avoidance via juristic person structuring — but flags vulnerable-consumer risk

A shopping centre lessor required a medical practitioner to contract through his incorporated professional company (a large juristic person exceeding the R2 million ministerial threshold) rather than in his personal capacity, so that the Consumer Protection Act would not apply to the lease. The tenant challenged the arrangement, arguing that the requirement rendered the lease void under s 51(1) of the CPA and was contra bonos mores.

The court held: The SCA dismissed the appeal. Section 51(1) prohibits unfair terms or conditions within a transaction or agreement, not pre-contractual requirements about the identity of the contracting party. Parties may lawfully arrange their commercial affairs to avoid the CPA by contracting through a juristic person, and doing so does not per se invalidate the agreement. The arrangement was not contra bonos mores because the tenant was not a vulnerable consumer and the lease reflected the true nature of the parties' agreement.

Legal impact: This is the first SCA-level endorsement of the widespread commercial practice of requiring counterparties to contract through large juristic persons to fall outside the CPA. It provides definitive authority that such structuring is permissible in arm's-length commercial contexts. However, the court expressly reserved the question of whether the position might differ where a vulnerable consumer (protected under s 3(1)(b) of the CPA) is involved, signalling that this structuring technique carries residual litigation risk in consumer-facing contexts.