LPL4801
Assignment 1 Semester 2 2025
Unique #:
Due Date: 29 August 2025
Detailed solutions, explanations, workings
and references.
+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).
Varsity Cube 2025 +27 81 278 3372
Assignment 1 Semester 2 2025
Unique #:
Due Date: 29 August 2025
Detailed solutions, explanations, workings
and references.
+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).
Varsity Cube 2025 +27 81 278 3372
