LPL4801
ASSIGNMENT 1
DUE DATE: 18 MARCH 2026
, LPL4801 ASSIGNMENT 1 2026
DUE 18 MARCH 2026
Paul (P) concludes a written agreement purchasing a motor vehicle from S (Suzie), a
motor dealer, on 1 January. The agreement is concluded at S’s registered business
address. The purchase price of the vehicle is R400,000 and is payable in 20 equal
monthly instalments. The agreement also makes provision for P to pay at 15% interest
per annum to S in respect of the deferred purchase price. There is a term in the
(a) Advise P in full on whether the National Credit Act 34 of 2005 (“the NCA”) is
applicable to this agreement.
The agreement constitutes a "credit agreement" as defined in section 8 of the NCA. It
specifically qualifies as an "instalment agreement" as described in section 8(4)(c) of the
NCA.¹ An instalment agreement is defined as a sale of movable property where all or
part of the purchase price is deferred and paid by periodic payments; possession and
use of the property is transferred to the consumer; and ownership either passes
immediately subject to a right of repossession, or on satisfaction of all the consumer's
financial obligations.² In this case, Paul purchases a motor vehicle (movable property)
from Suzie, a motor dealer, for R400,000 payable in 20 equal monthly instalments. The
agreement provides that ownership will only pass to Paul once the last instalment has
been paid, and the vehicle was delivered to Paul on 2 January.³
The two essential elements required for a credit agreement are present:
There is a deferral of repayment, the purchase price is payable in instalments over time,
and there is a fee, charge or interest imposed with respect to the deferred payment
(15% interest per annum is payable on the deferred purchase price).⁴
Then the parties are dealing at "arm's length" as required by section 4 of the NCA.⁵ Paul
is a consumer, a natural person and Suzie is a credit provider acting in the ordinary
course of business as a motor dealer.⁶
ASSIGNMENT 1
DUE DATE: 18 MARCH 2026
, LPL4801 ASSIGNMENT 1 2026
DUE 18 MARCH 2026
Paul (P) concludes a written agreement purchasing a motor vehicle from S (Suzie), a
motor dealer, on 1 January. The agreement is concluded at S’s registered business
address. The purchase price of the vehicle is R400,000 and is payable in 20 equal
monthly instalments. The agreement also makes provision for P to pay at 15% interest
per annum to S in respect of the deferred purchase price. There is a term in the
(a) Advise P in full on whether the National Credit Act 34 of 2005 (“the NCA”) is
applicable to this agreement.
The agreement constitutes a "credit agreement" as defined in section 8 of the NCA. It
specifically qualifies as an "instalment agreement" as described in section 8(4)(c) of the
NCA.¹ An instalment agreement is defined as a sale of movable property where all or
part of the purchase price is deferred and paid by periodic payments; possession and
use of the property is transferred to the consumer; and ownership either passes
immediately subject to a right of repossession, or on satisfaction of all the consumer's
financial obligations.² In this case, Paul purchases a motor vehicle (movable property)
from Suzie, a motor dealer, for R400,000 payable in 20 equal monthly instalments. The
agreement provides that ownership will only pass to Paul once the last instalment has
been paid, and the vehicle was delivered to Paul on 2 January.³
The two essential elements required for a credit agreement are present:
There is a deferral of repayment, the purchase price is payable in instalments over time,
and there is a fee, charge or interest imposed with respect to the deferred payment
(15% interest per annum is payable on the deferred purchase price).⁴
Then the parties are dealing at "arm's length" as required by section 4 of the NCA.⁵ Paul
is a consumer, a natural person and Suzie is a credit provider acting in the ordinary
course of business as a motor dealer.⁶
