LPL4801
Assignment 1 Semester 1 2026
Unique number:
Due Date: 18 March 2026
Detailed solutions, explanations, workings
and references.
+27 81 278 3372
, QUESTION 1
a)
The NCA regulates credit agreements concluded between parties who deal at arm’s
length within South Africa.1 An agreement will qualify as a credit agreement if
payment of a debt is deferred and a fee, charge or interest is payable in respect of
the deferred payment.2
Section 8 of the NCA identifies different categories of credit agreements, including
credit facilities, credit guarantees and credit transactions.3 Based on the facts, the
agreement between P and S is not a credit facility or credit guarantee, but rather a
credit transaction. More specifically, it constitutes an instalment agreement as
defined in section 8(4) of the NCA.4
An instalment agreement requires several elements which are
There must be a sale of movable property. In this case the agreement
concerns the sale of a motor vehicle, which qualifies as movable property.
The purchase price must be deferred. The vehicle costs R400 000 and
payment is deferred through twenty monthly instalments.
The payment must be made through periodic payments, which is satisfied
because P must make twenty monthly instalments.
Interest or charges must be payable in respect of the deferred amount. The
agreement provides for interest of fifteen per cent per annum
Possession and use of the goods must pass to the consumer. The motor
vehicle was delivered to P on 2 January.
Ownership must remain with the seller until full payment is made or may be
reclaimed upon default. The agreement specifically provides that ownership
will pass only once the final instalment is paid.5
1
National Credit Act 34 of 2005 s 4.
2
National Credit Act 34 of 2005 s 8(1).
3
National Credit Act 34 of 2005 s 8(1)(a)–(c).
4
National Credit Act 34 of 2005 s 8(4).
5
National Credit Act 34 of 2005 s 8(4)(a).
Varsity Cube 2026 +27 81 278 3372
Assignment 1 Semester 1 2026
Unique number:
Due Date: 18 March 2026
Detailed solutions, explanations, workings
and references.
+27 81 278 3372
, QUESTION 1
a)
The NCA regulates credit agreements concluded between parties who deal at arm’s
length within South Africa.1 An agreement will qualify as a credit agreement if
payment of a debt is deferred and a fee, charge or interest is payable in respect of
the deferred payment.2
Section 8 of the NCA identifies different categories of credit agreements, including
credit facilities, credit guarantees and credit transactions.3 Based on the facts, the
agreement between P and S is not a credit facility or credit guarantee, but rather a
credit transaction. More specifically, it constitutes an instalment agreement as
defined in section 8(4) of the NCA.4
An instalment agreement requires several elements which are
There must be a sale of movable property. In this case the agreement
concerns the sale of a motor vehicle, which qualifies as movable property.
The purchase price must be deferred. The vehicle costs R400 000 and
payment is deferred through twenty monthly instalments.
The payment must be made through periodic payments, which is satisfied
because P must make twenty monthly instalments.
Interest or charges must be payable in respect of the deferred amount. The
agreement provides for interest of fifteen per cent per annum
Possession and use of the goods must pass to the consumer. The motor
vehicle was delivered to P on 2 January.
Ownership must remain with the seller until full payment is made or may be
reclaimed upon default. The agreement specifically provides that ownership
will pass only once the final instalment is paid.5
1
National Credit Act 34 of 2005 s 4.
2
National Credit Act 34 of 2005 s 8(1).
3
National Credit Act 34 of 2005 s 8(1)(a)–(c).
4
National Credit Act 34 of 2005 s 8(4).
5
National Credit Act 34 of 2005 s 8(4)(a).
Varsity Cube 2026 +27 81 278 3372
