,LPL4801 Assignment 1 (COMPLETE ANSWERS) Semester
1 2025 (198055 )- DUE 18 March 15:00pm 2025; 100%
TRUSTED solutions and explanations…WE WISH YOU
ALL THE BEST
Question
Thandi is the sole owner of a catering business “Happy Snacky”
which provides food catering services. Thandi wants to buy a
second-hand Volkswagen Caddy to use in her business and
Prestige Bank agrees to sell the vehicle to Thandi on credit. The
agreement is signed at Thandi’s home on 2 May and possession
and use of the vehicle is given to her immediately. The
agreement makes provision for the sale of the vehicle voetstoots
at a price of R250,000 payable in monthly instalments over three
years and provision is made for the payment of fees and interest.
The agreement contains a clause that ownership of the vehicle
will only pass to Thandi once she has satisfied all her financial
obligations under the contract.
(a) Advise Thandi on whether the National Credit Act 34 of
2005 (“the NCA”) is applicable to the agreement. (6 marks)
Advice on the Applicability of the National Credit Act 34 of
2005 (NCA)
In this case, the agreement between Thandi and Prestige Bank
for the purchase of the second-hand Volkswagen Caddy is likely
to be subject to the National Credit Act 34 of 2005 (NCA). The
NCA regulates consumer credit agreements in South Africa and
, applies to agreements where credit is extended to individuals or
entities for personal, family, or household purposes.
Key Points to Consider:
1. Definition of a Credit Agreement: The NCA applies to
any agreement where credit is provided to a consumer. A
credit agreement is defined under the NCA as an agreement
where the lender provides goods or services to the
borrower, and the borrower undertakes to pay for those
goods or services over time. In this case, the sale of the
Volkswagen Caddy involves Thandi paying for the vehicle
in monthly instalments over three years, which is a typical
form of credit transaction.
2. Consumer Credit Agreement: The vehicle is being sold
to Thandi for business purposes, and she is purchasing it on
credit with payments spread out over time. Even though
Thandi owns the catering business, if the vehicle is
intended to be used for the business rather than personal
purposes, this could be a business credit agreement.
However, the NCA still applies to credit agreements for
business purposes, provided the business is small (i.e., it is
not a large enterprise).
3. Voetstoots Clause and Ownership Transfer: The clause
in the agreement that specifies ownership will only pass to
Thandi once she has paid off all her financial obligations is
significant. This is a typical feature in a hire purchase
agreement or credit sale, where the seller retains
ownership (or title) of the goods until the buyer has paid all
instalments. The NCA applies to hire purchase agreements,
1 2025 (198055 )- DUE 18 March 15:00pm 2025; 100%
TRUSTED solutions and explanations…WE WISH YOU
ALL THE BEST
Question
Thandi is the sole owner of a catering business “Happy Snacky”
which provides food catering services. Thandi wants to buy a
second-hand Volkswagen Caddy to use in her business and
Prestige Bank agrees to sell the vehicle to Thandi on credit. The
agreement is signed at Thandi’s home on 2 May and possession
and use of the vehicle is given to her immediately. The
agreement makes provision for the sale of the vehicle voetstoots
at a price of R250,000 payable in monthly instalments over three
years and provision is made for the payment of fees and interest.
The agreement contains a clause that ownership of the vehicle
will only pass to Thandi once she has satisfied all her financial
obligations under the contract.
(a) Advise Thandi on whether the National Credit Act 34 of
2005 (“the NCA”) is applicable to the agreement. (6 marks)
Advice on the Applicability of the National Credit Act 34 of
2005 (NCA)
In this case, the agreement between Thandi and Prestige Bank
for the purchase of the second-hand Volkswagen Caddy is likely
to be subject to the National Credit Act 34 of 2005 (NCA). The
NCA regulates consumer credit agreements in South Africa and
, applies to agreements where credit is extended to individuals or
entities for personal, family, or household purposes.
Key Points to Consider:
1. Definition of a Credit Agreement: The NCA applies to
any agreement where credit is provided to a consumer. A
credit agreement is defined under the NCA as an agreement
where the lender provides goods or services to the
borrower, and the borrower undertakes to pay for those
goods or services over time. In this case, the sale of the
Volkswagen Caddy involves Thandi paying for the vehicle
in monthly instalments over three years, which is a typical
form of credit transaction.
2. Consumer Credit Agreement: The vehicle is being sold
to Thandi for business purposes, and she is purchasing it on
credit with payments spread out over time. Even though
Thandi owns the catering business, if the vehicle is
intended to be used for the business rather than personal
purposes, this could be a business credit agreement.
However, the NCA still applies to credit agreements for
business purposes, provided the business is small (i.e., it is
not a large enterprise).
3. Voetstoots Clause and Ownership Transfer: The clause
in the agreement that specifies ownership will only pass to
Thandi once she has paid off all her financial obligations is
significant. This is a typical feature in a hire purchase
agreement or credit sale, where the seller retains
ownership (or title) of the goods until the buyer has paid all
instalments. The NCA applies to hire purchase agreements,
