100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Summary CML2010S Exam Notes: Credit Agency $4.52   Add to cart

Summary

Summary CML2010S Exam Notes: Credit Agency

1 review
 252 views  2 purchases
  • Course
  • Institution

Summary of textbook with lecture notes incorperated into summary Textbook D Collier-Reed and K Lehmann (eds) Basic Principles of Business Law (2nd ed; 2010)

Preview 8 out of 33  pages

  • June 23, 2017
  • 33
  • 2015/2016
  • Summary

1  review

review-writer-avatar

By: majoladoctor • 5 year ago

avatar-seller
1




Section 2: Credit Agreements

, 2



Introduction
National Credit Act 34 of 2005 (NCA)
What it does
• Regulates credit agreements

Purpose
To promote & advance welfare
 Social & economic
 Of South African people
To create a better credit market & industry
 By making it more
o Fair
o Transparent
o Competitive
o Sustainable
o Responsible
o Efficien
o Effective
o Accessible
To protect consumers from
 The imbalance of bargaining power
 Greed
 Ignorance
 Exploitative practices
 Etc.

What is a credit agreement?
Credit extended either by
 One party advancing money either
o To another party
o At the direction of another party
 Parties agree that payment
o Of money owed by one party to the other
o Will be deferred to future date
Cost to debtor for advancement of money/deferral of payment either
 In the form of
o Interest
o Charges
o Fees
o Combination of these
 In the form of
o A lesser amount being payable
o This is in case of early payment
o Called a discount transaction

, 3



Consumers & Credit Providers
Credit providers
Definition
 Party who
o Advances money/extends credit to another
o In terms of a credit agreement

Types of Credit providers
 The Party who
o Supplies goods or services under a
 Discount transaction
 Incidental credit agreement
 Installment agreement
o Advances money
 Under a pawn transaction
o Extends credit either
 Under a credit agreement
 Under a any other credit agreement
 The mortgagee
o Under a mortgage agreement
 The lender
o Under a secured loan
 The lessor
o Under a lease
 The party to whom
o An assurance or promise is made
o Under a credit agreement

, 4




Consumers
Definition
 Party to whom
o Credit is extended
 In terms of a credit agreement
o Money is advanced
 In terms of a credit agreement

Types of Credit providers
 The party to whom
o Goods or services are sold
 Under a
 Discount transaction
 Incidental credit agreement
 Installment agreement
o Money is lent
 Under a pawn transaction
o Credit is granted
 Under a credit facility
 The mortgager
o Under a mortgage agreement
 The borrower
o Under a secured loan
 The lessee
o Under a lease
 The grantor
o Under any other credit agreement

, 5



Scope of application of NCA
General application
Applies to credit agreements
 But only certain credit agreements
 Depends on
o Type of contract
o Size of contract
o Place of conclusion and effect
 Must take place in SA
o Parties to contract
o Purpose of contract
 Only sometimes

What is a credit agreement?
Credit extended either by
 One party advancing money either
o To another party
o At the direction of another party
 Parties agree that payment
o Of money owed by one party to the other
o Will be deferred to future date

Cost to debtor for advancement of money/deferral of payment either
 In the form of
o Interest
o Charges
o Fees
o Combination of these
 In the form of
o A lesser amount being payable
o This is in case of early payment
o Called a discount transaction

, 6




Types of Credit Agreements
General
NCA applies to
 Credit facilities
o Example = credit card
 Credit transactions
o Example = instalment sale agreement
 Credit guarantees
 Combination of the above
How it applies
 Applicable in different ways
 Applicable to varying degrees to each of the above

Credit facilities
Agreement in terms of which
 A credit provider (CP) undertakes to either
o Supply goods/services
o Pays amount
 To a Consumer
 Provides an assurance that
o The credit provider will pay
o If the consumer chooses to buy
Method of repayment
 Defers payment to future date
o All or part of money owed
 Bills consumer periodically for repayment
 Charges consumer interest and fees
o For deferred payment/amounts not paid
Examples
 Credit cards
 Bank loans
 Store accounts

, 7


Credit transactions
Pawn transactions
 Credit Povider (CP) gives money
 In exchange for goods
o Goods act as security

Discount transactions
 Goods/services provided over period of time
 Discounted price payable
o If debt repaid early

Incidental credit agreements
 Account rendered for goods/services
o Bill sent
o States when payment must be made
 If not paid by stated date either
o Interest/charges becomes payable
o 2 prices depending on date of payment
 Different amount due depending on when the bill is paid
 Example
 R100 in august
 R200 in september

Instalment agreements
 Deals with sale of moveable property
o Therfore not a house
 Delivery takes place
 Price then payable in instalments
o With interest/fees charged
 Ownership
o Remains vested in cp until paid in full
o Reverts to cp in case of default
 Example
o Buy a car on higher purchase agreement
o The dealership retains ownership until the amount is paid in full
o Failure to pay
 Ownership reverts to the cp
 You lose ownership to the party that is giving you the
money
Leases
 Movable goods lent to consumer
o rent payable either
 in instalments
 at later date
o interest and/or fees also payable
 Ownership
o passes to consumer on settlement of debt

, 8


 Overlaps with instalment sale agreements

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller byrondevin. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for $4.52. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

80467 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 14 years now

Start selling
$4.52  2x  sold
  • (1)
  Add to cart