Question 1:

Lucas Aphane approaches you for legal advice. He informs you

that he has recently concluded a suretyship agreement on behalf
of his partnership, ABC Partnership, with Lucky’s Stores. The
suretyship agreement pertains to an agreement in terms of which
ABC Partnership bought furniture from Lucky Stores for an amount
of R240 000. Mr Aphane further informs you that ABC Partnership
has an asset value and/or annual turnover of less than R1 million
and that the sale of the furniture took place in terms of a fixed-sum
sale agreement that does not contain an ownership reservation
clause. In terms of the sale agreement, which was concluded in
Johannesburg, the R240 000 will be payable to Lucky’s Stores in
compulsory minimum instalments and interest will be levied on it.
Answer the following question:

1.1 Lucas Aphane wants to know whether the National Credit Act
34 of 2005 would be applicable to both the suretyship agreement
concluded between himself and Lucky’s Stores and to the sale
agreement that was entered into between ABC Partnership and
Lucky Stores. Advise Lucas.

Answer:
NCA only applicable to suretyship agreement (which will then
be credit guarantee, if NCA applies to main agreement (the
sale)
Main agreement:
S 8(4)(f) other agreement (fixed-sum sale agreement that does
not contain an ownership reservation clause, deferral of
payment and interest) and thus a credit transaction and thus a
credit agreement
At arm’s length (no family etc involved; parties independent)
In SA (Johannesburg)
No exclusion applicable (partnership juristic person with asset
value of less than R1 million that concludes an intermediate
agreement)
Therefore NCA applicable to main agreement
Therefore NCA applicable to suretyship agreement which is a
credit guarantee

Question 2:
Tshepiso approaches you for legal advice on 6 September
2021. She informs you that she has signed an
acknowledgement of debt (“AOD”) on 24 August 2021. Upon
further enquiry it appears that Tshepiso has signed the AOD in
respect of a debt arising from a contract which had been
entered into between Tshepiso and her father a year ago. In
terms of this contract, which was concluded in Cape Town,
Tshepiso borrowed money from her father, who Tshepiso is
completely independent of. The particulars of the loan contract
are as follows: The total amount of the loan, R10 000, together
with interest and costs, was payable to Tshepiso’s father in 12
monthly instalments. Answer the following questions:
2.1 Advise Tshepiso, with reference to applicable case law,
whether the National Credit Act 34 of 2005 applies to the AOD
signed by Tshepiso in respect to the loan contract concluded
between Tshepiso and her father.

Answer:
The NCA only applies to an AOD that was signed in respect of
a credit agreement (credit facility or credit transaction) that is
subject to the NCA (Ratlou case)
Is NCA applicable to a credit agreement subject to the Act?
Loan which is repayable by Tshepiso to her father is a s 8(4)(f)
other agreement (no indication that evolving credit is involved)
At arm’s length?
Tshepiso and father are family members, but she is completely
independent of her father
Agreement thus at arm’s length
In SA
No exclusion applies
NCA thus applicable to agreement in terms of which AOD is
signed
And thus to the AOD

2.2 Would your answer to question 2.1 above have been

different in the case where Tshepiso and her father had been
co-dependent on each other at the time of entering into the loan
contract?

Answer:
Yes
NCA now not applicable to credit agreement between Tshepiso
and her father
Credit agreement not concluded at arm’s length (thus within
arm’s length)
Because the family members are co-dependent on each other
NCA therefore not applicable to AOD (Ratlou)

Question 3:
ABC Partnership bought furniture from Lucky Stores for an
amount of R240 000. The sale of the furniture took place in
terms of a fixed-sum sale agreement that contains an
ownership reservation clause. In terms of the sale agreement
the R240 000 will be payable to Lucky’s Stores in compulsory
minimum instalments and interest will be levied on it. Which
credit agreement (if any) in terms of the National Credit Act 34
of 2005 is involved?
Answer:
A sale of movable goods with an ownership reservation clause
and where payment is deferred and interest is charged is an
instalment agreement

Question 4:
Cobus approaches you for legal advice on 6 September 2021.
He informs you that he does not require advice in his personal
capacity, but on behalf of the sport club of which he is the
chairperson. Cobus informs you that a year ago the sport club,
AMC Rovers, an association of persons, bought irrigation
equipment to the value of R250 000 from Very Wet (Pty) Ltd, a
supplier of irrigation equipment. The particulars of the fixed-
sum contract, which was concluded in Pretoria and which
complies with the common law requirements for a valid and
binding contract of sale, are as follows: The purchase price of
R250 000, together with interest and costs, is payable to Very
Wet (Pty) Ltd in five half-yearly instalments. In terms of the
contract of sale AMC Rovers will become the owner of the
irrigation equipment upon payment of the full purchase price
together with interest and costs. According to Cobus he
ascertained on the day prior to consulting with you that Very
Wet (Pty) Ltd is not registered as a credit provider with the
National Credit Regulator. Answer the following question:
4.1 Cobus wants to know whether the abovementioned
contract of sale is valid and enforceable in terms of the National
Credit Act 34 of 2005?
Answer:
Very Wet (Pty) Ltd is only obliged to register as a credit
provider with the National Credit Regulator if the NCA is
applicable to the agreement between Very Wet (Pty) Ltd and
AMC Rovers
Is NCA applicable?
Agreement is an instalment sale agreement (and thus a credit
transaction and thus a credit agreement) (sale of movable
goods, fixed-sum with ownership reservation clause)
At arm’s length (no family, dependency etc)
In SA
Exclusions:
Club juristic person
That concluded a large agreement
Therefore exclusion and NCA not applicable
Consequently Very Wet (Pty) Ltd did not have to register as a
credit provider
And the credit agreement is valid and enforceable (in terms of
the common law) (which is always applicable to credit
agreements)
(If NCA was applicable and Very Wet (Pty) Ltd had to register
as a credit provider, the credit agreement would have been
unlawful and void).