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Contracts and NCA replies

5 March 2009

Anna-Marie van Rooyen writes:
I refer to the following section of Mr Allen West's article:

"Where the agreement is a credit agreement in terms of the NCA and governed by the said Act, the seller/credit provider need not be registered as credit provider, in terms of section 39(1) of the NCA where the person (owner/seller) operates within one province only.

Section 40(1)(a) and (b), however, stipulates that a seller/credit provider must be registered if that person is a credit provider who has concluded more than 100 credit agreements at any given time or the total principal debt owed to the credit provider under all outstanding credit agreements at any given time exceeds the threshold of R500 000,00.

Confusing, however, is the provisions of section 39 referred to supra which stipulates that section 40 does not apply to a credit provider operating within one province only."

I do not agree with the submission that section 39 has the effect that where 'n credit provider/seller operates within one province only, that such a person need not register. Section 39 clearly states as follows:

Sections 40 .... do not apply to a credit provider who-
(a) operates within one province; and
(b) is registered as a credit provider in terms of applicable provincial legislation, if the Minister has declared that the registration requirements in terms of that provincial legislation are comparable to or exceed the registration requirements in terms of this Act.


It is clear that section 40 would be applicable except where a person operates within one province and is registered in terms of provincial legislation as stated.

And Ken Mustard writes:
The exemption from registration as a credit provider in terms of section 39(1) where the credit provider (seller) only operates in one province is qualified by section 39 (1) (b) which provides that the credit provider who operates in only one province has to be registered in terms of applicable provincial legislation if the minister has declared that such legislation is comparable to or exceeds the requirements in terms of the NCA. Either way, the seller has to register.

If the seller does not register where he is obliged to do so then the agreement is unlawful in terms of section 89 (2) (d) of the NCA in which case in terms of section 89(5) a court must order that the agreement is void, the purchaser must be refunded what he has paid and the sellers right to recover the goods (property) must either be forfeited to the buyer unless the buyer will be unjustly enriched in which case it is forfeited to the state.

If a seller therefore sells under a suspensive sale agreement and should be registered under the act and does not do so he stands to lose his money and his property.



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