LPL4801 Assignment 1
Semester 2 2024 (526694) -
DUE 26 August 2024
[Company address]
, LPL4801 Assignment 1 Semester 2 2024 (526694) - DUE 26 August 2024
Question
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 2024 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 2024, 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)
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