CGSO Issues Guidance on Fixed-Term Agreement Renewals

Posted 17 October 2025 Written by Acts Online
Category Consumer Protection

Brought to you by SA Accounting Academy: The Consumer Goods & Services Ombud (CGSO) has published an advisory explanatory note detailing the mandatory requirements for the expiry, renewal, and cancellation of fixed-term agreements under the Consumer Protection Act, No. 68 of 2008.

In terms of section 14 of the Consumer Protection Act, No. 68 of 2008 (CPA), suppliers are required to follow specific procedures prior to and after the expiration of an initial contractual period. The CGSO note emphasizes that compliance with these provisions is mandatory, ensuring that contractual relationships do not become indefinite by default and that consumers can make informed choices regarding renewals.

Section 14(2)(c) of the Act places a strict obligation on suppliers to notify consumers in writing or any other recordable form of the impending expiry of a fixed-term agreement. This notification must be delivered not more than 80 business days and not less than 40 business days before the expiry date of the agreement.

Key Regulatory Requirements

  • Notice Period: Suppliers must provide notice of expiry between 40 and 80 business days prior to the end of the contract.
  • Disclosure: The notice must include any material changes that would apply if the agreement is renewed or otherwise continues beyond the expiry date.
  • Options: The notice must inform the consumer of their right to terminate the agreement upon expiry or agree to a renewal for a further fixed term.

Failure to comply with these notice requirements may result in the supplier being in violation of the CPA. The CGSO has indicated that non-compliance may lead to enforcement action, reputational risk, and the potential reversal of charges deemed unjust due to improper renewal processes.

Click here to download the Explanatory Note on the Expiry, Renewal and Cancellation of Fixed-Term Agreements.

What this means for you, your business, or your clients

  • For yourself: Ensure you understand the specific timelines in Section 14(2)(c) to provide accurate legal or compliance advice regarding contract enforceability.
  • For your business: Audit existing CRM and billing systems to ensure automated expiry notifications are dispatched strictly within the 40-to-80 business day window.
  • For your clients: Advise clients that failure to provide the statutory notice allows consumers to terminate agreements without penalty upon expiry, or results in the contract continuing on a month-to-month basis rather than a fixed-term renewal.

Originally published at https://accountingacademy.co.za/news/read/cgso-expiry-renewal-and-cancellation-of-fixed-term-agreements

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