Results 1 to 6 of 6

Thread: NCA / CPA grey area

  1. #1
    Full Member BuyNoEvil's Avatar
    Join Date
    Jun 2011
    Location
    Johannesburg
    Posts
    40
    Thanks
    0
    Thanked 11 Times in 7 Posts

    NCA / CPA grey area

    IN terms of the NCA, credit transactions entered into with juristics with a turnover or asset value R1M or above are excluded and the NCA does not apply. Thus these agreements cannot be classed as credit agreements in terms of the NCA.

    The CPA exempts credit agreements in terms of the NCA from CPA applicability.

    The CPA's threshold for transactions by juristics as consumers to fall outside of the CPA is R2M.

    Thus the grey area. The CPA would apply to credit transaction entered into between juristic persons with a t/o or a/v of greater than R1m up to R2M. Full CPA applicability in respect of what everyone would generally regard as a "credit agreement". Also means that suretyships signed in respect of these transaction would fall under the CPA.

    Looking for the clever people to comment. Am I correct in my thinking?

  2. #2
    Site Caretaker Dave A's Avatar
    Join Date
    May 2006
    Location
    Durban, South Africa
    Posts
    20,979
    Thanks
    3,055
    Thanked 2,462 Times in 2,067 Posts
    Blog Entries
    12
    Quote Originally Posted by BuyNoEvil View Post
    The CPA would apply to credit transaction entered into between juristic persons with a t/o or a/v of greater than R1m up to R2M. Full CPA applicability in respect of what everyone would generally regard as a "credit agreement". Also means that suretyships signed in respect of these transaction would fall under the CPA.
    What effect does the CPA have on suretyships?
    The trouble with opportunity is it normally comes dressed up as work.

  3. #3
    Full Member BuyNoEvil's Avatar
    Join Date
    Jun 2011
    Location
    Johannesburg
    Posts
    40
    Thanks
    0
    Thanked 11 Times in 7 Posts
    Part of my post relates to that.

    In terms of the NCA, and case law, a suretyship is of an accessory nature, and one would have to look at the principal debt and applicability of the NCA to that debt in order to see whether the NCA applies to the suretyship. So, if the NCA does not apply to the principal debt, then the NCA also does not apply to the suretyship. If the NCA does not apply, then neither the principal debt or suretyship can be regarded as a credit agreement in terms of the NCA. (one of the exclusions of the CPA).

    The point thus is that if the NCA does not apply, then there is nothing preventing the CPA from applying.

    All the rules of the CPA, such as, plain and simple language, disclosure requirements, fair and honest dealings, fair pricing, unconscionable conduct, etc, etc.

  4. #4
    Full Member
    Join Date
    Oct 2011
    Location
    Gordon's Bay, Western Cape
    Posts
    67
    Thanks
    2
    Thanked 2 Times in 2 Posts
    Hi there,

    According to my understanding, the CPA does not apply to transactions between juristic entities, regardless of their turnover (therefor called the CONSUMER Protection Act).

    Regards,
    Mr Smit

  5. #5
    Site Caretaker Dave A's Avatar
    Join Date
    May 2006
    Location
    Durban, South Africa
    Posts
    20,979
    Thanks
    3,055
    Thanked 2,462 Times in 2,067 Posts
    Blog Entries
    12
    Quote Originally Posted by mbsmit View Post
    According to my understanding, the CPA does not apply to transactions between juristic entities, regardless of their turnover (therefor called the CONSUMER Protection Act).
    Well, we'd better be correcting that, then

    A juristice person which has assets under R2 million and a turnover under R2 million is a consumer in terms of the CPA.

    If either turnover or assets held exceed R2 million, only then does it no longer enjoy protection as a consumer by the CPA.
    The trouble with opportunity is it normally comes dressed up as work.

  6. #6
    Full Member BuyNoEvil's Avatar
    Join Date
    Jun 2011
    Location
    Johannesburg
    Posts
    40
    Thanks
    0
    Thanked 11 Times in 7 Posts
    If I could just add to that as follows:

    Section 14 of the Act dealing with expiry, cancellation and renewal of fixed term contracts do not apply to juristics at all, irrespective of t/o or a/v.

    Section 60 (Safety monitoring and recall) and Section 61 (Liability for harm or damage caused by goods) always applies, even if a transaction is exempt from the provisions of the Act.

  7. Thanks given for this post:

    Dave A (20-Oct-11)

Similar Threads

  1. The problem with arguing about shades of grey.
    By Dave A in forum General Chat Forum
    Replies: 22
    Last Post: 09-Feb-11, 10:20 AM
  2. [Question] Any best way to improve my business in my local area?
    By jim04 in forum General Business Forum
    Replies: 5
    Last Post: 01-Jun-10, 10:26 AM

Did you like this article? Share it with your favourite social network.

Did you like this article? Share it with your favourite social network.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •