LPL4801
ASSIGNMENT 1 SEMESTER 2 2025
UNIQUE NO. 185363
DUE DATE: 29 AUGUST 2025
, (a) Applicability of the NCA (6 marks)
Issue: Does the National Credit Act 34 of 2005 (“NCA”) apply to the instalment sale
agreement between Patricia and Luxury Pools (Pty) Ltd?
Rule:
The NCA applies to all credit agreements between parties dealing at arm’s length,
unless exempted (s 4(1)). An instalment agreement arises where goods are delivered,
payment is deferred, and ownership is reserved until the full purchase price is paid (s
8(4)(b)). Exemptions include large credit agreements with juristic persons above the
statutory threshold or incidental credit agreements.
Application:
Patricia is a natural person, and the purchase price of R52,000 is well within the scope
of the NCA. The transaction falls within the definition of an instalment agreement as
ownership is retained until final payment. No exemption applies.
Conclusion:
The NCA applies to Patricia’s instalment sale agreement.
(b) Registration as a credit provider (4 marks)
Issue: Must Luxury Pools (Pty) Ltd register as a credit provider?
Rule:
Section 40 of the NCA requires registration if a person is the credit provider under one
or more credit agreements in the ordinary course of business. The Constitutional Court
confirmed that following the 2016 amendment, the threshold for registration is “nil,”
meaning registration is compulsory even for a single credit agreement if entered into in
ASSIGNMENT 1 SEMESTER 2 2025
UNIQUE NO. 185363
DUE DATE: 29 AUGUST 2025
, (a) Applicability of the NCA (6 marks)
Issue: Does the National Credit Act 34 of 2005 (“NCA”) apply to the instalment sale
agreement between Patricia and Luxury Pools (Pty) Ltd?
Rule:
The NCA applies to all credit agreements between parties dealing at arm’s length,
unless exempted (s 4(1)). An instalment agreement arises where goods are delivered,
payment is deferred, and ownership is reserved until the full purchase price is paid (s
8(4)(b)). Exemptions include large credit agreements with juristic persons above the
statutory threshold or incidental credit agreements.
Application:
Patricia is a natural person, and the purchase price of R52,000 is well within the scope
of the NCA. The transaction falls within the definition of an instalment agreement as
ownership is retained until final payment. No exemption applies.
Conclusion:
The NCA applies to Patricia’s instalment sale agreement.
(b) Registration as a credit provider (4 marks)
Issue: Must Luxury Pools (Pty) Ltd register as a credit provider?
Rule:
Section 40 of the NCA requires registration if a person is the credit provider under one
or more credit agreements in the ordinary course of business. The Constitutional Court
confirmed that following the 2016 amendment, the threshold for registration is “nil,”
meaning registration is compulsory even for a single credit agreement if entered into in
