Some Observations Regarding Reckless Credit in Terms of the National Credit Act 34 of 2005

2010 (73) THRHR

7 Pages Posted: 26 Feb 2018

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Date Written: 2010

Abstract

In general, and depending on the reason for invalidity, where parties have performed in terms of an invalid or void contract or where a voidable contract has been voided, the general rule is that they are in principle entitled to claim a return of their respective performances or claim in terms of unjustified enrichment, except where they are in law barred from doing so. (Cf Laco Parts (Pty) Ltd t/a ACA Clutch v Turners Shipping (Pty) Ltd 2008 (1) SA 279 (W). For the purposes of this note restoration will be used in a wide sense as to include the return of performance or an enrichment claim.) However, it is trite law that legality is one of the basic elements of a valid contract. In essence this element requires the parties to a contract not to enter into an illegal contract in that the purported contract must not be prohibited by a rule of law. Contracts of a particular kind may for instance be prohibited by a specific legislative provision, or it may be prohibited at common law if it militates against the good morals or the public interest or policy. (See in general Van der Merwe et al Contract general principles (2007) para 7.1 and Otto “Die par delictum-reël en die National Credit Act” 2009 TSAR 417.)

Suggested Citation

Boraine, Andre, Some Observations Regarding Reckless Credit in Terms of the National Credit Act 34 of 2005 (2010). 2010 (73) THRHR, Available at SSRN: https://ssrn.com/abstract=3124242

Andre Boraine (Contact Author)

University of Pretoria ( email )

Physical Address Economic and Management Sciences
Pretoria, Gauteng 0002
South Africa

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