The Consumer Protection Act (CPA) contains extensive regulations prescribing terms and information that must be included in franchise agreements. However, although it had been raised in several cases that a franchise agreement that the parties had concluded omitted some of the prescribed details, in none of these cases had the courts declared outright that these omissions rendered the agreements void, or even that it afforded either of the parties the option of cancelling the agreement. For example, in Steynberg v Tammy Taylor Nails Franchising No 45 (Pty) Ltd, the Court noted that the franchisee had raised the argument that the franchise agreement was null and void as the requirement of the CPA had not been complied with. However, in the end result, the Court did not decide the point because it found that the agreement was null and void for other reasons.
In a recent judgment, published on 5 February 2026, The Lemon Tree (Pty) Ltd & Others v Shift Espresso Bar Holdings (Pty) Ltd, the Western Cape High Court was again asked to deal with an argument that the franchise agreement between the parties was “unenforceable for non-compliance with the CPA and thus void or voidable”. In that case, the Court took a step towards ruling on the issue, but stopped short of an unequivocal pronouncement.
The Court in The Lemon Tree did not explicitly address the wording of the agreement between the parties to answer the question. Instead, it referred in passing, and with apparent approval, to the 2008 decision of the Natal High Court in Pratsch t/a Caltex Mooi River v Rasmussen. In that case, the Court, faced with a contract that had been concluded in contravention of the regulations in terms of the Petroleum Products Act, stated: “Invalidity cannot simply in all instances be read into a statutory prohibition, where this was not stipulated by the legislature, and where it is not required by necessary implication to prevent frustration of the object sought to be achieved by the legislation”.
The Court then went on to restate the common law position that “a party who has been induced to enter into a contract by the other party’s misrepresentation of an existing fact is entitled to rescind (or resile from) the contract provided the misrepresentation was material, was intended to induce the person to whom it was made to enter into the contract, and did so induce that person to conclude the contract. Unless a misrepresentation is material, or in respect of a material fact, it will not justify the rescission of the contract. Put another way, it would be surprising if the law were to permit a party to rescind a contract merely because the party had been the victim of a misrepresentation on a matter of minor importance. Put another way, the misrepresentation (non-disclosure) must have factually induced the contract”.
The Court in The Lemon Tree did not explicitly state that the omission from a franchise agreement of information required by the CPA did or did not render the agreement void or voidable. However, the fact that, immediately after referring to the Pratsch judgment above, the Court set out in detail the effect of a misrepresentation on a contract, seems to lead to the conclusion that the omission of prescribed information will result in the contract being void or voidable only where the omission amounts to a misrepresentation of a material fact, and induced the party who was misled to enter into the agreement.
