MERCANTILE LAW · CONSUMER CREDIT
AGREEMENTS
Theme 1
Consumer Credit
Agreements
Complete study notes for the 30% MCQ test
Built from the National Credit Act 34 of 2005 and its regulations, official
case reports, and NCR/law-firm commentary — independently
researched and verified, not paraphrased from any single textbook.
Includes: common law foundations · NCA structure & thresholds · case
law · formation, interest & termination rules · reckless lending · debt
enforcement · a full section-number reference · MCQ trap patterns · and
a visual annexure.
,CONTENTS
0. How to attack an NCA MCQ
1. Big picture: common law → NCA
2. Common law: loan of consumption
3. NCA overview & thresholds
4. Credit agreements: definition & categories
5. Key cases
6. Regulatory institutions
7. Basic consumer rights
8. Prohibited marketing practices
9. Formation & content
10. Interest, fees & charges
11. Alteration of agreements
12. Rescission & termination
13. Reckless lending & over-indebtedness
14. Debt enforcement
15. Other relevant legislation
16. Section-number quick reference
17. Common MCQ trap patterns
18. One-page recall sheet
Annexure A. Visual maps (regulatory structure, classification flowchart, termination
routes)
Mercantile Law — Theme 1: Consumer Credit Agreements · Page 2 of 35
, A NOTE ON SOURCES
The legal content below (Act sections, case facts and holdings, regulatory formulas) is drawn
independently from primary sources — the National Credit Act 34 of 2005 and its regulations,
official case reports, and NCR/law-firm commentary — rather than paraphrased from any single
textbook. The structure, mnemonics, diagrams, and worked examples throughout are original.
0. How to Attack an NCA MCQ
MCQ examiners on this module lean on four traps. Before you pick an answer, run the
scenario through this checklist:
1. Natural vs juristic person. Over-indebtedness and reckless credit (Part D) never
apply to a juristic-person consumer, no matter how small the company. If the facts say
"Pty Ltd" or "CC," half the reckless-credit options are automatically wrong.
2. Size of the agreement. Small / Intermediate / Large changes which form, which
disclosure, and whether cooling-off is even available. Underline the Rand figure the
moment you see it.
3. "May" vs "must," "and" vs "or." The Act is drafted with precision — s9's category tests
use "or," s6's exclusions are a closed list. Examiners swap these words to create a false
option.
4. Once-off vs repeat transactions. Students assume the Act only catches "credit
industry" players. Du Bruyn NO v Karsten killed that assumption — a single, once-off,
arm's-length loan can still trigger registration.
Use Annexure A (at the end of this document) for the big-picture diagrams, then use the
sections below for the depth each option in an MCQ will test.
Mercantile Law — Theme 1: Consumer Credit Agreements · Page 3 of 35
, 1. The Big Picture — Common Law → NCA
COMMON LAW NATIONAL CREDIT ACT 34 of 2005
───────────── ──────────────────────────────
Loan of consumption (mutuum) ──▶ Ch 1: definitions, application,
Usury / interest rules thresholds, categories (s1–11)
In duplum rule (case law) ──▶ Ch 2: NCR & NCT (s12–38)
Ch 3: registration (s39–59)
Still applies: Ch 4: consumer rights, marketing,
• where NCA is excluded reckless credit (s60–88B)
(s4, s6, s8(2)) Ch 5: the agreement itself —
• incidental credit agreements unlawful terms, disclosure,
(limited application) interest, alteration, termination
(s89–123)
Ch 6: collection, surrender,
enforcement (s124–133)
MNEMONIC
"MUD" — the common law foundation is Mutuum, Usury, Duplum. Everything in Theme 1 either
codifies or sits alongside these three.
Mercantile Law — Theme 1: Consumer Credit Agreements · Page 4 of 35
AGREEMENTS
Theme 1
Consumer Credit
Agreements
Complete study notes for the 30% MCQ test
Built from the National Credit Act 34 of 2005 and its regulations, official
case reports, and NCR/law-firm commentary — independently
researched and verified, not paraphrased from any single textbook.
Includes: common law foundations · NCA structure & thresholds · case
law · formation, interest & termination rules · reckless lending · debt
enforcement · a full section-number reference · MCQ trap patterns · and
a visual annexure.
,CONTENTS
0. How to attack an NCA MCQ
1. Big picture: common law → NCA
2. Common law: loan of consumption
3. NCA overview & thresholds
4. Credit agreements: definition & categories
5. Key cases
6. Regulatory institutions
7. Basic consumer rights
8. Prohibited marketing practices
9. Formation & content
10. Interest, fees & charges
11. Alteration of agreements
12. Rescission & termination
13. Reckless lending & over-indebtedness
14. Debt enforcement
15. Other relevant legislation
16. Section-number quick reference
17. Common MCQ trap patterns
18. One-page recall sheet
Annexure A. Visual maps (regulatory structure, classification flowchart, termination
routes)
Mercantile Law — Theme 1: Consumer Credit Agreements · Page 2 of 35
, A NOTE ON SOURCES
The legal content below (Act sections, case facts and holdings, regulatory formulas) is drawn
independently from primary sources — the National Credit Act 34 of 2005 and its regulations,
official case reports, and NCR/law-firm commentary — rather than paraphrased from any single
textbook. The structure, mnemonics, diagrams, and worked examples throughout are original.
0. How to Attack an NCA MCQ
MCQ examiners on this module lean on four traps. Before you pick an answer, run the
scenario through this checklist:
1. Natural vs juristic person. Over-indebtedness and reckless credit (Part D) never
apply to a juristic-person consumer, no matter how small the company. If the facts say
"Pty Ltd" or "CC," half the reckless-credit options are automatically wrong.
2. Size of the agreement. Small / Intermediate / Large changes which form, which
disclosure, and whether cooling-off is even available. Underline the Rand figure the
moment you see it.
3. "May" vs "must," "and" vs "or." The Act is drafted with precision — s9's category tests
use "or," s6's exclusions are a closed list. Examiners swap these words to create a false
option.
4. Once-off vs repeat transactions. Students assume the Act only catches "credit
industry" players. Du Bruyn NO v Karsten killed that assumption — a single, once-off,
arm's-length loan can still trigger registration.
Use Annexure A (at the end of this document) for the big-picture diagrams, then use the
sections below for the depth each option in an MCQ will test.
Mercantile Law — Theme 1: Consumer Credit Agreements · Page 3 of 35
, 1. The Big Picture — Common Law → NCA
COMMON LAW NATIONAL CREDIT ACT 34 of 2005
───────────── ──────────────────────────────
Loan of consumption (mutuum) ──▶ Ch 1: definitions, application,
Usury / interest rules thresholds, categories (s1–11)
In duplum rule (case law) ──▶ Ch 2: NCR & NCT (s12–38)
Ch 3: registration (s39–59)
Still applies: Ch 4: consumer rights, marketing,
• where NCA is excluded reckless credit (s60–88B)
(s4, s6, s8(2)) Ch 5: the agreement itself —
• incidental credit agreements unlawful terms, disclosure,
(limited application) interest, alteration, termination
(s89–123)
Ch 6: collection, surrender,
enforcement (s124–133)
MNEMONIC
"MUD" — the common law foundation is Mutuum, Usury, Duplum. Everything in Theme 1 either
codifies or sits alongside these three.
Mercantile Law — Theme 1: Consumer Credit Agreements · Page 4 of 35
