LPL4801
Assignment 1 Semester 2 2025
2 2025
Unique Number:
Due date: 29 August 2025
(a) Applicability of the National Credit Act (6 marks)
The National Credit Act 34 of 2005 (“NCA”) applies to all credit agreements between parties
dealing at arm’s length, unless specifically exempted under section 4.1 A credit agreement
includes both credit facilities and credit transactions. Section 8(4)(d) defines an instalment
agreement as a credit agreement where payment of the purchase price is deferred and
interest or fees are charged.1
Patricia purchased the Jacuzzi for R52,000 on credit, with payment in twelve instalments,
together with interest at 18% per annum. Ownership was retained by Luxury Pools until full
payment, a hallmark of an instalment sale agreement under the NCA. She is a natural
person, and the loan amount is below the statutory threshold that could exempt large juristic
persons.
Therefore, the agreement qualified as a credit agreement governed by the NCA, and Luxury
Pools had to comply with obligations such as conducting an affordability assessment in
terms of section 81 before granting credit.1
DISCLAIMER & TERMS OF USE
Educational Aid: These study notes are intended to be used as educational resources and should not be seen as a
replacement for individual research, critical analysis, or professional consultation. Students are encouraged to perform
their own research and seek advice from their instructors or academic advisors for specific assignment guidelines.
Personal Responsibility: While every effort has been made to ensure the accuracy and reliability of the information in
these study notes, the seller does not guarantee the completeness or correctness of all content. The buyer is
responsible for verifying the accuracy of the information and exercising their own judgment when applying it to their
assignments.
Academic Integrity: It is essential for students to maintain academic integrity and follow their institution's policies
regarding plagiarism, citation, and referencing. These study notes should be used as learning tools and sources of
inspiration. Any direct reproduction of the content without proper citation and acknowledgment may be considered
academic misconduct.
Limited Liability: The seller shall not be liable for any direct or indirect damages, losses, or consequences arising from
the use of these notes. This includes, but is not limited to, poor academic performance, penalties, or any other negative
consequences resulting from the application or misuse of the information provided.
, For additional support +27 81 278 3372
(a) Applicability of the National Credit Act (6 marks)
The National Credit Act 34 of 2005 (“NCA”) applies to all credit agreements between
parties dealing at arm’s length, unless specifically exempted under section 4.1 A
credit agreement includes both credit facilities and credit transactions. Section
8(4)(d) defines an instalment agreement as a credit agreement where payment of
the purchase price is deferred and interest or fees are charged.2
Patricia purchased the Jacuzzi for R52,000 on credit, with payment in twelve
instalments, together with interest at 18% per annum. Ownership was retained by
Luxury Pools until full payment, a hallmark of an instalment sale agreement under
the NCA. She is a natural person, and the loan amount is below the statutory
threshold that could exempt large juristic persons.
Therefore, the agreement qualified as a credit agreement governed by the NCA, and
Luxury Pools had to comply with obligations such as conducting an affordability
assessment in terms of section 81 before granting credit.3
(b) Requirement to register as a credit provider (4 marks)
Section 40(1) of the NCA requires any person or entity entering into a credit
agreement to be registered as a credit provider, regardless of the number of
agreements, after the Minister reduced the registration threshold to nil in 2016.4
The court in Absa Technology Finance Solutions (Pty) Ltd v Michael’s Bid House CC
confirmed that failure to register as a credit provider where required renders the
agreement unlawful and void in terms of section 89(2)(d).5
Since Luxury Pools extended credit by deferring payment and charging interest, it
qualified as a credit provider and was required to be registered with the National
Credit Regulator (NCR). If not registered, the agreement would be unlawful and
unenforceable.6
1
National Credit Act 34 of 2005 s 4.
2
National Credit Act 34 of 2005 s 8(4)(d).
3
National Credit Act 34 of 2005 s 81.
4
National Credit Act 34 of 2005 s 40(1).
5
Absa Technology Finance Solutions (Pty) Ltd v Michael’s Bid House CC 2013 (3) SA 426 (SCA).
6
National Credit Act 34 of 2005 s 89(2)(d).
Assignment 1 Semester 2 2025
2 2025
Unique Number:
Due date: 29 August 2025
(a) Applicability of the National Credit Act (6 marks)
The National Credit Act 34 of 2005 (“NCA”) applies to all credit agreements between parties
dealing at arm’s length, unless specifically exempted under section 4.1 A credit agreement
includes both credit facilities and credit transactions. Section 8(4)(d) defines an instalment
agreement as a credit agreement where payment of the purchase price is deferred and
interest or fees are charged.1
Patricia purchased the Jacuzzi for R52,000 on credit, with payment in twelve instalments,
together with interest at 18% per annum. Ownership was retained by Luxury Pools until full
payment, a hallmark of an instalment sale agreement under the NCA. She is a natural
person, and the loan amount is below the statutory threshold that could exempt large juristic
persons.
Therefore, the agreement qualified as a credit agreement governed by the NCA, and Luxury
Pools had to comply with obligations such as conducting an affordability assessment in
terms of section 81 before granting credit.1
DISCLAIMER & TERMS OF USE
Educational Aid: These study notes are intended to be used as educational resources and should not be seen as a
replacement for individual research, critical analysis, or professional consultation. Students are encouraged to perform
their own research and seek advice from their instructors or academic advisors for specific assignment guidelines.
Personal Responsibility: While every effort has been made to ensure the accuracy and reliability of the information in
these study notes, the seller does not guarantee the completeness or correctness of all content. The buyer is
responsible for verifying the accuracy of the information and exercising their own judgment when applying it to their
assignments.
Academic Integrity: It is essential for students to maintain academic integrity and follow their institution's policies
regarding plagiarism, citation, and referencing. These study notes should be used as learning tools and sources of
inspiration. Any direct reproduction of the content without proper citation and acknowledgment may be considered
academic misconduct.
Limited Liability: The seller shall not be liable for any direct or indirect damages, losses, or consequences arising from
the use of these notes. This includes, but is not limited to, poor academic performance, penalties, or any other negative
consequences resulting from the application or misuse of the information provided.
, For additional support +27 81 278 3372
(a) Applicability of the National Credit Act (6 marks)
The National Credit Act 34 of 2005 (“NCA”) applies to all credit agreements between
parties dealing at arm’s length, unless specifically exempted under section 4.1 A
credit agreement includes both credit facilities and credit transactions. Section
8(4)(d) defines an instalment agreement as a credit agreement where payment of
the purchase price is deferred and interest or fees are charged.2
Patricia purchased the Jacuzzi for R52,000 on credit, with payment in twelve
instalments, together with interest at 18% per annum. Ownership was retained by
Luxury Pools until full payment, a hallmark of an instalment sale agreement under
the NCA. She is a natural person, and the loan amount is below the statutory
threshold that could exempt large juristic persons.
Therefore, the agreement qualified as a credit agreement governed by the NCA, and
Luxury Pools had to comply with obligations such as conducting an affordability
assessment in terms of section 81 before granting credit.3
(b) Requirement to register as a credit provider (4 marks)
Section 40(1) of the NCA requires any person or entity entering into a credit
agreement to be registered as a credit provider, regardless of the number of
agreements, after the Minister reduced the registration threshold to nil in 2016.4
The court in Absa Technology Finance Solutions (Pty) Ltd v Michael’s Bid House CC
confirmed that failure to register as a credit provider where required renders the
agreement unlawful and void in terms of section 89(2)(d).5
Since Luxury Pools extended credit by deferring payment and charging interest, it
qualified as a credit provider and was required to be registered with the National
Credit Regulator (NCR). If not registered, the agreement would be unlawful and
unenforceable.6
1
National Credit Act 34 of 2005 s 4.
2
National Credit Act 34 of 2005 s 8(4)(d).
3
National Credit Act 34 of 2005 s 81.
4
National Credit Act 34 of 2005 s 40(1).
5
Absa Technology Finance Solutions (Pty) Ltd v Michael’s Bid House CC 2013 (3) SA 426 (SCA).
6
National Credit Act 34 of 2005 s 89(2)(d).
