, LPL4801
ASSIGNMENT 1 SEMESTER 2
2026
DUE 28 AUGUST 2026
QUESTION 1
1. INTRODUCTION
We have been requested to advise on a dispute with a customer, Judy, regarding a credit
agreement concluded on 1 May. The dispute concerns the applicability of the National Credit Act
34 of 2005 (the NCA), the lawfulness of the charged interest rate, the potential overlap with the
Consumer Protection Act 68 of 2008 (the CPA), and an allegation of reckless credit. We address
each point in turn.
2. QUESTION 1(A): APPLICABILITY OF THE NATIONAL CREDIT ACT
Advise your client in full whether the National Credit Act 34 of 2005 (the NCA) is in fact applicable
to the said agreement.
We confirm that the NCA is indeed applicable to the credit agreement between Forever You (Pty)
Ltd and Judy. This conclusion is based on the facts that Forever You is a registered credit provider
and that the agreement meets the statutory definition of a credit agreement.
Section 4 of the NCA sets out the application of the Act and provides that the NCA applies to every
credit agreement between parties dealing at arm's length within South Africa, subject to certain
exemptions contained in section 5. None of the exemptions in section 5 appear to apply to Forever
You, as the company is a registered credit provider and the agreement is not a small agreement
exempted by the Minister. Section 8 of the NCA defines various types of credit agreements, and the
agreement in question falls squarely within the definition of a credit facility as set out in section
8(3). This section provides that a credit facility is an agreement where a credit provider supplies
goods or services to a consumer and the consumer's obligation to pay the price is deferred, and the
consumer pays interest and fees. Judy opened an account, was granted a credit limit of R5,000, and
deferred payment for clothing purchased, with interest charged on the outstanding balance.
Furthermore, section 40 of the NCA requires every credit provider who provides credit under a
credit agreement to be registered with the National Credit Regulator. Since Forever You is
described as a registered credit provider, this further confirms that the agreement is fully subject to
the NCA. We therefore advise that the allegation by Kenny Y Attorneys that the NCA is applicable is
correct, and the agreement is indeed regulated by the Act.
ASSIGNMENT 1 SEMESTER 2
2026
DUE 28 AUGUST 2026
QUESTION 1
1. INTRODUCTION
We have been requested to advise on a dispute with a customer, Judy, regarding a credit
agreement concluded on 1 May. The dispute concerns the applicability of the National Credit Act
34 of 2005 (the NCA), the lawfulness of the charged interest rate, the potential overlap with the
Consumer Protection Act 68 of 2008 (the CPA), and an allegation of reckless credit. We address
each point in turn.
2. QUESTION 1(A): APPLICABILITY OF THE NATIONAL CREDIT ACT
Advise your client in full whether the National Credit Act 34 of 2005 (the NCA) is in fact applicable
to the said agreement.
We confirm that the NCA is indeed applicable to the credit agreement between Forever You (Pty)
Ltd and Judy. This conclusion is based on the facts that Forever You is a registered credit provider
and that the agreement meets the statutory definition of a credit agreement.
Section 4 of the NCA sets out the application of the Act and provides that the NCA applies to every
credit agreement between parties dealing at arm's length within South Africa, subject to certain
exemptions contained in section 5. None of the exemptions in section 5 appear to apply to Forever
You, as the company is a registered credit provider and the agreement is not a small agreement
exempted by the Minister. Section 8 of the NCA defines various types of credit agreements, and the
agreement in question falls squarely within the definition of a credit facility as set out in section
8(3). This section provides that a credit facility is an agreement where a credit provider supplies
goods or services to a consumer and the consumer's obligation to pay the price is deferred, and the
consumer pays interest and fees. Judy opened an account, was granted a credit limit of R5,000, and
deferred payment for clothing purchased, with interest charged on the outstanding balance.
Furthermore, section 40 of the NCA requires every credit provider who provides credit under a
credit agreement to be registered with the National Credit Regulator. Since Forever You is
described as a registered credit provider, this further confirms that the agreement is fully subject to
the NCA. We therefore advise that the allegation by Kenny Y Attorneys that the NCA is applicable is
correct, and the agreement is indeed regulated by the Act.
