Does the NCA affect all agreements?

[Eugene]

Dave when dealing with exemptions in respect of juristic persons one must distinguish between when the agreement is completely exempted from the Act versus when the Act applies, but the agreement is exempted from certain parts/provisions of the NCA.

In the following instances where juristic persons are consumers under credit agreements, such agreements are exempted completely from the application of the Act:

- Sec. 4(1)(a)(i): Where the consumer is a juristic person whose asset value or annual turnover, together with the combined asset value or annual turnover of all related juristic persons, at the time the agreement is made, equals or exceeds the threshold value
determined by the Minister (currently R1 million);
- Sec. 4(1)(b): The credit agreement is a large agreement (sec. 9(4) ) in terms of which the consumer is a juristic person with annual turnover / asset value below the threshold set by the Minister.

In all other cases where a juristic person is the consumer under a credit agreement, the agreement is exempt from the following parts of the Act (sec. 6):

- Chapter 4, Part C = credit marketing practices
- Chapter 4, Part D = reckless credit and over-indebtedness
- Chapter 5, Part A sec 89(2) = unlawfulness of negative option marketing
- Chapter 5, Part A sec 90(2)(o) = unlawful provisions relating to variable interest rates charged on the principal debt; and
- Chapter 5, Part C = consumer’s liability, interest, charges and fees.

[TishB]

What category does a non interest bearing staff loan with a 6 month repayment option fall under? is it an incidental credit agreement? do companies have the right to transfer monies into a staff members account and then ask them to sign a "staff loan form?

[Dave A]

do companies have the right to transfer monies into a staff members account and then ask them to sign a "staff loan form?

I would expect the staff loan form should be signed before the money is transfered. It's also a good idea to deal with staff "emergency" loans and advances in your employment contract to allow deductions of instalments from salary and to allow deduction of the full balance owed on loans against termination settlement pay.