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Thread: Cancellation of study course

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    Cancellation of study course

    Hi, need some advise on behalf of my sister regarding cancellation of a correspondence study course and how the National Credit Act might assist. The course is structured in that you pay R400 a month and after paying R800 you receive one module. She has paid R800 so far and received that one module, but has not paid for the past 2 months as she was weighing up whether to continue with the course. She has now asked for cancellation of the course. The institution is now stating that 1) she needs to pay R800 for the past two months even though no further modules have been received 2) the course cannot be cancelled and she must continue paying as they have no cancellation policy.

    It is an installment agreement over 18 months. The below is what I could find with regards to the Act. I would expect that seen that she has not received any new modules (versus already obtaining all the material in the course) means that the Act would be in her favour even more so than simply returning a single goods item? Any advice would be appreciated, thanks.


    Surrender or return of goods by the consumer and how it affects the consumer
    The Act specifies that a consumer can withdraw from an instalment sale, secured loan or lease agreement at any time by returning the goods to the credit provider. When the consumer returns the goods to the credit
    provider, the credit provider is expected to sell them and credit the consumer's account with the proceeds of the sale. If the proceeds from the sale are more than the consumer's debt, the credit provider must
    refund any surplus to the consumer. If the proceeds are less than the consumer's debt, the consumer is obliged to pay the outstanding amount the credit provider within 10 days.

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    Site Caretaker Dave A's Avatar
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    There's a nasty sting in the tail with the hook you're trying to hang your argument on.
    Quote Originally Posted by Justin99 View Post
    If the proceeds from the sale are more than the consumer's debt, the credit provider must
    refund any surplus to the consumer. If the proceeds are less than the consumer's debt, the consumer is obliged to pay the outstanding amount the credit provider within 10 days.
    So they sell access to the 18 month course to someone else at a fraction of the normal price, and your sister has to pay the shortfall on the full 18 months within 10 days...
    The trouble with opportunity is it normally comes dressed up as work.

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    Silver Member Greig Whitton's Avatar
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    Quote Originally Posted by Justin99 View Post
    The institution is now stating that 1) she needs to pay R800 for the past two months even though no further modules have been received 2) the course cannot be cancelled and she must continue paying as they have no cancellation policy.
    Tell the institution that while they may not have a cancellation policy, the Consumer Protection Act entitles your sister to cancel any fixed term agreement with 20 business days' notice. This won't absolve your sister of the payment due for the previous two months, and the institution can charge a reasonable cancellation fee on top of this, but at least she can get out of this sooner rather than later.

    Founder of Evergrow - Helping South African business owners grow their business without the growing pains

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    Platinum Member sterne.law@gmail.com's Avatar
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    I doubt the contract will qualify as a fix term agreement.
    I am premising that you purchased a item, and were given time to pay it off. Unlike a DSTV agreement, where you pay a monthly fee for XYZ months.

    If it is an instalment sale and there is any interest or penalty clause then it may fall under a credit agreement.

    The first step is to determine the content of the agreement - that is; was there a contract for an entire course, financed as XYZ, or a prepaid system, whereby once payment is received the other party performs by delivering.

    If the first, your hope rests on it being a credit agreement and they are not registered, or its reckless etc.
    If the second, then quite simply, the contract on the second module did not come into play as you have not performed yet.

    Regarding selling it off. They are obligated to sell it at the best possible price.
    If it is immoveable property, this obligation does not exist.
    Last edited by sterne.law@gmail.com; 11-Dec-14 at 02:54 PM. Reason: Forgot something
    Anthony Sterne

    www.acumenholdings.co.za
    DISCLAIMER The above is merely a comment in discussion form and an open public arena. It does not constitute a legal opinion or professional advice in any manner or form.

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    Silver Member Greig Whitton's Avatar
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    Quote Originally Posted by sterne.law@gmail.com View Post
    I doubt the contract will qualify as a fix term agreement. I am premising that you purchased a item, and were given time to pay it off. Unlike a DSTV agreement, where you pay a monthly fee for XYZ months.
    If I understand OP correctly, his sister did not receive all of the learning modules upfront. She receives a new module every two months in exchange for monthly payment of R400. So she is not paying off a single purchase and her contracting relationship is more akin to your DSTV example. Furthermore, she is contracted for a fixed period of time (18 months). I don't see how it can be anything other than a fixed term agreement.

    Founder of Evergrow - Helping South African business owners grow their business without the growing pains

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    Platinum Member sterne.law@gmail.com's Avatar
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    Indeed the contract could be either, hence the need establish its form.
    The only way to determine is to read the entire contract.
    The contract may even be drafted to appear as if fixed term or vice versa even if it is not.
    Anthony Sterne

    www.acumenholdings.co.za
    DISCLAIMER The above is merely a comment in discussion form and an open public arena. It does not constitute a legal opinion or professional advice in any manner or form.

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    Justin, the guys here are battling to give better advice in the absence of the agreement. May i suggest you scan the agreement (block your name) and post here and look forward to more accurate answers to your dilemma

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