Description
LPL4801 Assignment 1 Semester 2 2024 | Due 26 August 2024
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 outstandingmamount. 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)
(b) Advise your client in full whether the interest rate that was charged is allowed under the NCA and, if not, the effect on the validity of the agreement. (4)
(c) Advise your client whether it is possible that the NCA and the Consumer Protection Act 68 of 2008 can be applicable to this agreement. Also remember to refer to applicable case law in your answer.
(d) Advise your client in full regarding the allegations made that your client entered into a reckless credit agreement and the effect thereof. (4)
(e) Your client wants to know, in general, whether all its clients will have a “cooling-off” right in terms of the NCA after buying goods from it on credit. Advise your client. (4)
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