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LPL4801: LAW OF SALE AND LEASE
OCT/NOV Examination 2026
Covers Past Examination Papers: 2023 – 2025
⋆ ⋄ ⋆ ⋄ ⋆ ⋄ ⋆ ⋄ ⋆
DEPARTMENT OF PRIVATE LAW — UNISA
Comprehensive Exam Revision Guide
LPL4801
Module Code:
Law of Sale and Lease
Module Name:
OCT/NOV Examination 2026
Paper:
Oct/Nov 2023, 2024 & 2025 Papers
Covers:
100 marks per paper
Total Marks:
3 hours
Duration:
6 Questions — Answer ALL
Questions:
Study for understanding, not memorisation. Focus on applying principles to new
fact patterns using case law.
Exam Revision Notes | LPL4801 | 2023–2025 Coverage
,LPL4801 | Exam Revision OCT/NOV Examination 2026
PAPER A — OCT/NOV 2025 EXAMINATION
University Examinations: LPL4801 — Law of Sale and Lease (100 marks, 3 hours)
Key Concept
Examination Structure (2025): The paper consists of 6 questions totalling 100
marks. All questions must be answered. Questions draw on the Law of Sale (including
the Consumer Protection Act 68 of 2008, National Credit Act 34 of 2005, and Alien-
ation of Land Act 68 of 1981) and the Law of Lease (including the Rental Housing Act
50 of 1999 and Consumer Protection Act lease provisions).
Page 2 of 47
,LPL4801 | Exam Revision OCT/NOV Examination 2026
Question 1 [20 marks]
(a) [10 marks]
Question: Sipho concludes a written instalment sale agreement with DriveNow (Pty) Ltd
for the purchase of a second-hand motor vehicle for R180 000. The agreement provides
for a deposit of R20 000, with the remaining R160 000 payable in 48 monthly instalments
at an interest rate of 32% per annum. DriveNow did not conduct an affordability assess-
ment before concluding the agreement. Sipho has paid three instalments but can no longer
afford the vehicle and wishes to return it.
(i) Advise Sipho fully on whether the National Credit Act 34 of 2005 (“the NCA”) applies
to this agreement. (4)
(ii) Advise Sipho whether the stated interest rate is permissible under the NCA. (3)
(iii) Discuss any remedies available to Sipho under the NCA. (3)
Answer:
(i) Applicability of the NCA (4 marks)
Key Concept
The National Credit Act 34 of 2005 (NCA) applies to credit agreements where:
(a) the consumer is a natural person, juristic person with asset value or annual turnover
below R1 million, or a state-owned entity; (b) the credit provider is not an excluded
party; (c) the agreement falls within a recognised credit category; and (d) neither
exclusion under section 4(1) applies.
Applying the facts:
• Sipho is a natural person, so he qualifies as a consumer under the NCA.
• DriveNow (Pty) Ltd is a juristic person acting as credit provider. It must be registered as
a credit provider under section 40 of the NCA if it regularly extends credit.
• The agreement is an instalment agreement as defined in section 1 of the NCA: it in-
volves credit for the purchase of goods, payable in instalments, and the goods serve as
security.
• The credit amount (R160 000) falls within the threshold for a large agreement (over
R250 000 is large; R15 000–R250 000 is intermediate). As it is R160 000, it is an interme-
Page 3 of 47
,LPL4801 | Exam Revision OCT/NOV Examination 2026
diate agreement.
• No exclusion under section 4(1) applies (e.g., it is not a credit agreement between family
members, nor exceeds the large-agreement threshold triggering the juristic-person exclu-
sion).
Conclusion: The NCA applies to this agreement. DriveNow must be registered as a credit
provider.
(ii) Permissible Interest Rate (3 marks)
Under the NCA, the maximum interest rate for an instalment agreement (intermediate agree-
ment) is determined by the formula prescribed in the National Credit Regulations. The pre-
scribed maximum for instalment agreements is the repo rate plus 17% (i.e., approximately
25–26% depending on the repo rate at the time). A rate of 32% per annum exceeds the maxi-
mum permissible rate.
Watch Out
If the interest rate exceeds the prescribed maximum, the offending term is unlawful.
The credit provider cannot recover the excess interest, and the consumer may apply
to court for a declaration that the agreement is reckless credit if, in addition, no
affordability assessment was conducted.
Since DriveNow failed to conduct an affordability assessment before concluding the agreement,
the credit is reckless under section 80(1)(b)(i) of the NCA (credit was granted despite an
adverse assessment or without any assessment at all).
(iii) Remedies available to Sipho (3 marks)
• Reckless credit declaration: Sipho may apply to court under section 83 of the NCA to
have the agreement declared reckless. If granted, the court may set aside all obligations
arising from the agreement or suspend it, allowing Sipho to return the vehicle without
further liability.
• Right to return goods (voluntary surrender): Under section 127 of the NCA, a con-
sumer under an instalment agreement may return the goods to the credit provider at any
time. The credit provider must sell the goods and apply proceeds against the outstanding
balance. If the proceeds are insufficient, Sipho remains liable for the shortfall; if sufficient,
DriveNow must pay the surplus to Sipho.
• Debt review: If Sipho is over-indebted, he may apply to a debt counsellor under section
Page 4 of 47
,LPL4801 | Exam Revision OCT/NOV Examination 2026
86 for debt review, which may result in restructured payments.
• Complaint to the NCR: Sipho may lay a complaint with the National Credit Regulator
regarding the unlawful interest rate and the failure to conduct an affordability assessment.
(b) [10 marks]
Question: Discuss the concept of reckless credit under the NCA. In your answer,
define reckless credit, explain when a court may make a reckless credit declaration, and set
out the consequences of such a declaration. (10)
Answer:
Definition of Reckless Credit
Reckless credit is defined in section 80 of the NCA. A credit agreement constitutes reckless
credit when:
• the credit provider failed to conduct an assessment as required by section 81; or
• the credit provider conducted an assessment but entered into the agreement despite
the consumer not understanding the risks, costs, and obligations; or
• the credit provider entered into the agreement despite the assessment showing that the
consumer was over-indebted or that granting the credit would render the consumer
over-indebted.
When a court may make a reckless credit declaration
Under section 83(1), a court may, at any time, declare a credit agreement to be reckless on
application by the consumer or a debt counsellor. The court will examine:
1. Whether the credit provider failed to assess the consumer’s understanding of the agree-
ment;
2. Whether the consumer’s existing financial obligations were adequately considered; and
3. Whether the consumer was over-indebted at the time or would become over-indebted as a
result of the agreement.
Page 5 of 47
, LPL4801 | Exam Revision OCT/NOV Examination 2026
Exam Tip
Examiners often ask you to apply the reckless credit provisions to a factual scenario.
Always check: Was an assessment done? Did the consumer understand the risks? Was
the consumer over-indebted? Then discuss the appropriate remedy.
Consequences of a Reckless Credit Declaration (s 83(2))
• The court may set aside all or part of the consumer’s obligations under the agreement.
This is the most drastic remedy and effectively cancels the debt.
• Alternatively, the court may suspend the agreement for a period determined by the
court and during that period the consumer’s obligations are suspended, but the agreement
continues thereafter.
• The credit provider loses its right to credit costs and fees if the agreement is set
aside under reckless credit provisions.
• The court may also make a debt-rearrangement order under section 87 in addition to
the reckless credit declaration.
Example
In African Bank Ltd v Myambo the court confirmed that where a credit provider grants
credit without conducting any affordability assessment whatsoever, the agreement is
reckless and the court has wide discretion to set aside obligations. The consumer need
not prove actual harm — the failure to assess is sufficient.
Page 6 of 47
]]
LPL4801: LAW OF SALE AND LEASE
OCT/NOV Examination 2026
Covers Past Examination Papers: 2023 – 2025
⋆ ⋄ ⋆ ⋄ ⋆ ⋄ ⋆ ⋄ ⋆
DEPARTMENT OF PRIVATE LAW — UNISA
Comprehensive Exam Revision Guide
LPL4801
Module Code:
Law of Sale and Lease
Module Name:
OCT/NOV Examination 2026
Paper:
Oct/Nov 2023, 2024 & 2025 Papers
Covers:
100 marks per paper
Total Marks:
3 hours
Duration:
6 Questions — Answer ALL
Questions:
Study for understanding, not memorisation. Focus on applying principles to new
fact patterns using case law.
Exam Revision Notes | LPL4801 | 2023–2025 Coverage
,LPL4801 | Exam Revision OCT/NOV Examination 2026
PAPER A — OCT/NOV 2025 EXAMINATION
University Examinations: LPL4801 — Law of Sale and Lease (100 marks, 3 hours)
Key Concept
Examination Structure (2025): The paper consists of 6 questions totalling 100
marks. All questions must be answered. Questions draw on the Law of Sale (including
the Consumer Protection Act 68 of 2008, National Credit Act 34 of 2005, and Alien-
ation of Land Act 68 of 1981) and the Law of Lease (including the Rental Housing Act
50 of 1999 and Consumer Protection Act lease provisions).
Page 2 of 47
,LPL4801 | Exam Revision OCT/NOV Examination 2026
Question 1 [20 marks]
(a) [10 marks]
Question: Sipho concludes a written instalment sale agreement with DriveNow (Pty) Ltd
for the purchase of a second-hand motor vehicle for R180 000. The agreement provides
for a deposit of R20 000, with the remaining R160 000 payable in 48 monthly instalments
at an interest rate of 32% per annum. DriveNow did not conduct an affordability assess-
ment before concluding the agreement. Sipho has paid three instalments but can no longer
afford the vehicle and wishes to return it.
(i) Advise Sipho fully on whether the National Credit Act 34 of 2005 (“the NCA”) applies
to this agreement. (4)
(ii) Advise Sipho whether the stated interest rate is permissible under the NCA. (3)
(iii) Discuss any remedies available to Sipho under the NCA. (3)
Answer:
(i) Applicability of the NCA (4 marks)
Key Concept
The National Credit Act 34 of 2005 (NCA) applies to credit agreements where:
(a) the consumer is a natural person, juristic person with asset value or annual turnover
below R1 million, or a state-owned entity; (b) the credit provider is not an excluded
party; (c) the agreement falls within a recognised credit category; and (d) neither
exclusion under section 4(1) applies.
Applying the facts:
• Sipho is a natural person, so he qualifies as a consumer under the NCA.
• DriveNow (Pty) Ltd is a juristic person acting as credit provider. It must be registered as
a credit provider under section 40 of the NCA if it regularly extends credit.
• The agreement is an instalment agreement as defined in section 1 of the NCA: it in-
volves credit for the purchase of goods, payable in instalments, and the goods serve as
security.
• The credit amount (R160 000) falls within the threshold for a large agreement (over
R250 000 is large; R15 000–R250 000 is intermediate). As it is R160 000, it is an interme-
Page 3 of 47
,LPL4801 | Exam Revision OCT/NOV Examination 2026
diate agreement.
• No exclusion under section 4(1) applies (e.g., it is not a credit agreement between family
members, nor exceeds the large-agreement threshold triggering the juristic-person exclu-
sion).
Conclusion: The NCA applies to this agreement. DriveNow must be registered as a credit
provider.
(ii) Permissible Interest Rate (3 marks)
Under the NCA, the maximum interest rate for an instalment agreement (intermediate agree-
ment) is determined by the formula prescribed in the National Credit Regulations. The pre-
scribed maximum for instalment agreements is the repo rate plus 17% (i.e., approximately
25–26% depending on the repo rate at the time). A rate of 32% per annum exceeds the maxi-
mum permissible rate.
Watch Out
If the interest rate exceeds the prescribed maximum, the offending term is unlawful.
The credit provider cannot recover the excess interest, and the consumer may apply
to court for a declaration that the agreement is reckless credit if, in addition, no
affordability assessment was conducted.
Since DriveNow failed to conduct an affordability assessment before concluding the agreement,
the credit is reckless under section 80(1)(b)(i) of the NCA (credit was granted despite an
adverse assessment or without any assessment at all).
(iii) Remedies available to Sipho (3 marks)
• Reckless credit declaration: Sipho may apply to court under section 83 of the NCA to
have the agreement declared reckless. If granted, the court may set aside all obligations
arising from the agreement or suspend it, allowing Sipho to return the vehicle without
further liability.
• Right to return goods (voluntary surrender): Under section 127 of the NCA, a con-
sumer under an instalment agreement may return the goods to the credit provider at any
time. The credit provider must sell the goods and apply proceeds against the outstanding
balance. If the proceeds are insufficient, Sipho remains liable for the shortfall; if sufficient,
DriveNow must pay the surplus to Sipho.
• Debt review: If Sipho is over-indebted, he may apply to a debt counsellor under section
Page 4 of 47
,LPL4801 | Exam Revision OCT/NOV Examination 2026
86 for debt review, which may result in restructured payments.
• Complaint to the NCR: Sipho may lay a complaint with the National Credit Regulator
regarding the unlawful interest rate and the failure to conduct an affordability assessment.
(b) [10 marks]
Question: Discuss the concept of reckless credit under the NCA. In your answer,
define reckless credit, explain when a court may make a reckless credit declaration, and set
out the consequences of such a declaration. (10)
Answer:
Definition of Reckless Credit
Reckless credit is defined in section 80 of the NCA. A credit agreement constitutes reckless
credit when:
• the credit provider failed to conduct an assessment as required by section 81; or
• the credit provider conducted an assessment but entered into the agreement despite
the consumer not understanding the risks, costs, and obligations; or
• the credit provider entered into the agreement despite the assessment showing that the
consumer was over-indebted or that granting the credit would render the consumer
over-indebted.
When a court may make a reckless credit declaration
Under section 83(1), a court may, at any time, declare a credit agreement to be reckless on
application by the consumer or a debt counsellor. The court will examine:
1. Whether the credit provider failed to assess the consumer’s understanding of the agree-
ment;
2. Whether the consumer’s existing financial obligations were adequately considered; and
3. Whether the consumer was over-indebted at the time or would become over-indebted as a
result of the agreement.
Page 5 of 47
, LPL4801 | Exam Revision OCT/NOV Examination 2026
Exam Tip
Examiners often ask you to apply the reckless credit provisions to a factual scenario.
Always check: Was an assessment done? Did the consumer understand the risks? Was
the consumer over-indebted? Then discuss the appropriate remedy.
Consequences of a Reckless Credit Declaration (s 83(2))
• The court may set aside all or part of the consumer’s obligations under the agreement.
This is the most drastic remedy and effectively cancels the debt.
• Alternatively, the court may suspend the agreement for a period determined by the
court and during that period the consumer’s obligations are suspended, but the agreement
continues thereafter.
• The credit provider loses its right to credit costs and fees if the agreement is set
aside under reckless credit provisions.
• The court may also make a debt-rearrangement order under section 87 in addition to
the reckless credit declaration.
Example
In African Bank Ltd v Myambo the court confirmed that where a credit provider grants
credit without conducting any affordability assessment whatsoever, the agreement is
reckless and the court has wide discretion to set aside obligations. The consumer need
not prove actual harm — the failure to assess is sufficient.
Page 6 of 47
