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Lay-Bye Agreements
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Lay-Bye Agreements

The purpose of this alert is to inform consumers about what to consider when making lay-bye purchases.



What is a Lay- Bye Agreement?

A lay-bye agreement is a way of paying for goods over an agreed period of time, whereby the service provider holds the goods until the consumer has paid their full price. To lay-bye goods, the consumer pays a small deposit, and subsequently makes regular repayments until the total price is paid. Each lay-bye agreement is different, but all include three or more payments.



A lay-bye contract must be clear and readable, and include the following details:

  • Full description of the goods purchased;
  • Total price of the goods purchased;
  • Amount of the deposit paid and outstanding balance;
  • Date on which additional payments are due, for example weekly, monthly, etc;
  • If any cancellation fees apply, and how they are calculated;
  • Service provider's details, trading name, and street address, and;
  • Any other terms or conditions.


A Guide to Consumers on Cancelling a Lay-Bye Agreement

You may cancel a lay-bye contract before the goods are delivered or if they are damaged when you receive them. If the service provider does not accept a verbal cancellation, the supplier must provide you with a cancellation form and clearly set out the following:

  • Purchase price;
  • Total amount paid on the lay-bye, and;
  • Amount owing to the business or due back to the buyer by way of refund - generally, a service provider keeps 10% of the amount paid.


A Guide to Service Providers on Cancelling a Lay-Bye Agreement

If you fail to meet the requirements of the lay-bye contract, the business/service provider concerned may cancel the contract. However, before doing so, the service provider should first:

  • Send a written notice advising you on how you have failed to meet the requirements of the contract; and
  • Give you 14 days to meet the contractual requirements.


If you still do not meet the requirements, the service provider may:

  • Cancel the lay-bye agreement;
  • Charge the agreed cancellation fee (10%) and deduct it from the refund of any monies already paid; and
  • Refund the balance to you within 14 days of cancellation.


Should you require any additional information or clarification you can contact the Education Division via the the dti Customer Contact Center at 0861 843 384.

Or write to the dti at:
the dti
Consumer Complaints
Consumer and Corporate Regulation Division
Private Bag X84


Other Services:

The Education and Compliance Directorate issues ongoing information alerts as part of an education service to South African consumers. The Directorate also offers the following services:

  • Advisory opinions and clarifications
  • Presentations; and
  • Information/educational materials


Issued by: The Education and Compliance Directorate

(sourced from http://www.thedti.gov.za)


Copyright © 2017 Ombudsmen. All Rights Reserved.

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