Exam (elaborations)
LPL4801 Assignment 1 Semester 2 2022
- Institution
- University Of South Africa (Unisa)
This document contains solutions for LPL4801 Assignment 1 Semester 2 2022
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LPL4801 ASSESSMENT 01SEMESTER 2 – 2022
, Forever You (Pty) Ltd is a well-known clothing store in South Africa. They offer
store cards to customers who buy clothing on credit and are a registered credit
provider in terms of the National Credit Act 34 of 2005. When customers buy
clothing on credit, an interest rate of 20% per annum is charged on the
outstanding amount. Judy, a customer, opens an account on 1 May 2022 at
Forever You (Pty) Ltd. Based on her salary slips and the credit assessment
performed by Forever You (Pty) Ltd, she is allowed a credit limit of R5,000. On
the same day, she spends R5,000 on new clothes. She pays the first instalment
on 1 June 2022, but fails to make any further payments. You are acting as
Forever You (Pty) Ltd’s legal representative. It transpires that Judy has obtained
legal advice from Kenny Y Attorneys. The attorneys have addressed a letter to
your client with the following allegations:
That the credit agreement between Forever You (Pty) Ltd and Judy is a credit
facility in terms of the National Credit Act 34 of 2005, and that the interest rate
that is charged by your client is excessive, rendering the agreement between
your client and Judy null and void.
It is further alleged that the clothing was of bad quality and that Judy is entitled
to return the clothing in terms of the Consumer Protection Act 68 of 2008.
In the alternative, it is stated that your client entered into a reckless credit
agreement with Judy, rendering the credit agreement null and void.
(a) Advise your client in full whether the National Credit Act 34 of 2005 (the NCA)
is in fact applicable to the said agreement. (4)
(b) Advise your client in full whether the interest rate that was charged is allowed
under the NCA and, if not, the effect on the validity of the agreement. (4)
(c) Advise your client whether it is possible that the NCA and the Consumer
Protection Act 68 of 2008 can be applicable to this agreement. Also
remember to refer to applicable case law in your answer. (4)
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