Example- a consumer orders a fancy birthday cake from a bakery in Durban. The bakery notifies the consumer to say they can come and collect the cake. The consumer paid a 50% deposit of R1000 for the cake. Before the consumer gets to the bakery to collect the cake, intense flooding occurs in Durban and the shopping mall in which the bakery is located is submerge din water and mud, so that the cake is ruined. When the consumer is able to contact the bakery, the staff wash their hands and claim they can rely on force majeure. So they do not offer to provide the cake- in any event, the birthday party has already taken place, and they also do not agree to refund the R1000 deposit.
Common law: Impossibility of performance
If it becomes objectively impossible for the supplier to perform under a contract, e.g. when the bakery gets flooded, both parties are absolved of their duty to perform, in other words, the bakery won’t need to supply the cake, and the consumer doesn’t have to pay. If the consumer has already paid anything, the bakery is obliged to pay them back.
When does risk pass? Normally with movable goods (i.e. everything except for land and buildings), risk passes on delivery of the goods to the purchaser.
Force majeure
However, when an event happens after a sale contract was concluded, which neither of the parties to the contract expected, and the parties have already agreed on the exact item being sold and the price, and the event causes the item to be damaged or destroyed, the consumer still has to pay.
BUT if the Consumer Protection Act applies:
Section 19(2)(c) of the Consumer Protection Act has turned the force majeure rule on its head- it says goods to be delivered to the consumer (i.e. goods the consumer still has to collect) remain at the risk of the supplier until the consumer has accepted delivery of the goods. That means that if the cake is destroyed, stolen, lost or damaged before the consumer has collected it, the bakery bears the risk, i.e. they will have to have a new cake made up for the consumer at no further cost (unless the consumer declines this). If the damage, theft, loss etc of the cake happened after the consumer had taken possession (collected) the cake, then the bakery is not liable, because the risk passes to the consumer along with possession of the goods.