Credit Advice for Patricia. Question Patricia concludes a written agreement for the purchase of a free standing Jacuzzi from Luxury Pools (Pty) Ltd on 1 June at her home. The purchase price of the Jacuzzi is R52,000 which is payable in twelve equal monthly instalments. The agreement also makes prov...
Question Patricia concludes a written agreement for the purchase of a free standing Jacuzzi
from Luxury Pools (Pty) Ltd on 1 June at her home. The purchase price of the Jacuzzi is
R52,000 which is payable in twelve equal monthly instalments. The agreement also makes
provision for Patricia to pay interest at 18% per annum to Luxury Pools (Pty) Ltd in respect of
the deferred purchase price and that ownership of the Jacuzzi shall be retained by Luxury Pools
(Pty) Ltd until Patricia satisfies all her financial obligations under the agreement. At the time of
conclusion of the contract the repo rate is 7% and the prime rate is 10.5%. The Jacuzzi is
delivered to Patricia on 2 June. Patricia approaches you for legal advice on 10 June. She
explains that although she can afford the Jacuzzi she has changed her mind and no longer
wishes to continue with the agreement. She also informs you that she paid the first instalment
on 2 June and would like to claim back this instalment. It appears that Luxury Pools (Pty) Ltd did
not do a proper credit assessment prior to the conclusion of the agreement. (a) (b) Advise
Patricia on whether the National Credit Act (“the NCA”) is applicable to the agreement. (6)
Advise Patricia whether Luxury Pools (Pty) Ltd has to register as a credit provider for the
purposes of the agreement above. (4) (c) (d) (e) Advise Patricia whether the stated interest rate
is allowed in terms of the NCA. (4) Advise Patricia on whether she has any remedies against
Luxury Pools (Pty) Ltd. (4) What effect would a clause in the contract excluding the liability of
Luxury Pools (Pty) Ltd for any latent defects in the Jacuzzi have? (2)
Total [20]
(a) Advise on the applicability of the National Credit Act (NCA) to the agreement:
The NCA is legislation in South Africa that regulates credit agreements and protects consumers.
Its primary aim is to promote responsible lending and borrowing practices. The NCA applies to
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