Exam (elaborations)
LPL4801 Assignment 1 Semester 2 [Due: 25 August 2023]
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LPL4801 Assignment 1 Semester 2 [Due: 25 August 2023]
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LPL4801ASSIGNMENT 1 (SEMESTER 2)
DUE DATE: 25 August 2023
Written Assignment Submission Guidelines:
Please ensure that your assignment is submitted electronically through the myUnisa platform no later than
25 August 2023. Kindly note that fax or email submissions will not be accepted.
NB: Assignment submitted to the lecturer(s) through email will not be considered.
QUESTION
Patricia concludes a written agreement for the purchase of a free standing Jacuzzi from Luxury Pools (Pty)
Ltd on 1 June at her home. The purchase price of the Jacuzzi is R52,000 which is payable in twelve equal
monthly instalments. The agreement also makes provision for Patricia to pay interest at 18% per annum to
Luxury Pools (Pty) Ltd in respect of the deferred purchase price and that ownership of the Jacuzzi shall be
retained by Luxury Pools (Pty) Ltd until Patricia satisfies all her financial obligations under the agreement.
At the time of conclusion of the contract the repo rate is 7% and the prime rate is 10.5%. The Jacuzzi is
delivered to Patricia on 2 June. Patricia approaches you for legal advice on 10 June. She explains that
although she can afford the Jacuzzi she has changed her mind and no longer wishes to continue with the
agreement. She also informs you that she paid the first instalment on 2 June and would like to claim back
this instalment. It appears that Luxury Pools (Pty) Ltd did not do a proper credit assessment prior to the
conclusion of the agreement.
(a) Advise Patricia on whether the National Credit Act (“the NCA”) is applicable to the agreement.
ANSWER:
The National Credit Act ("NCA") is applicable to credit agreements that fall within its scope. In Patricia's
case, she entered into an agreement to purchase a Jacuzzi from Luxury Pools (Pty) Ltd and is required
to make twelve equal monthly instalment payments. Given that the agreement involves deferred
payment, it is likely to be considered a credit agreement under the NCA. The NCA broadly defines a
credit agreement as an agreement in terms of which payment of an amount owed by one person (the
consumer) to another person (the credit provider) is deferred or is to be paid in instalments, and
interest, fees, or other charges are payable. Therefore, Patricia's agreement with Luxury Pools (Pty) Ltd
would generally be subject to the NCA.
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