LPL4801
Assignment 1
Semester 2 2024
(526694) - DUE
26 August 2024
QUESTIONS WITH DETAILED ANSWERS
, 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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