Some Observations Regarding Reckless Credit in Terms of the National Credit Act 34 of 2005
Journal of Contemporary Roman-Dutch Law, Vol. 73, p. 650, 2010
7 Pages Posted: 5 Aug 2011
Date Written: August 5, 2010
Section 81(3) of the National Credit Act 34 of 2005 clearly provides that a credit provider must not enter into a reckless credit agreement with a prospective consumer. Section 3(c)(ii) of the NCA also states that it is one of the purposes of this Act to discourage reckless credit. The NCA, however, does not state that credit agreements that give rise to reckless credit are ab initio null and void as is the case with unlawful credit agreements in terms of section 89 of the NCA. (S 89 deals with unlawful credit agreements but the section does not indicate reckless credit agreements as being unlawful – see para 3 1 below.) Courts may, however, declare credit agreements in terms of the NCA to be reckless and may then, depending on the type of reckless credit, inter alia set aside all or part of the consumer’s rights and duties in terms thereof or suspend its operation.
Keywords: Credit agreement, reckless credit
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