In this case the court reviewed the circumstances under which a lender has to register as a “credit provider” in terms of the National Credit Act. The court held that the Act applied not just to organisations and persons in the business of money lending but to any person making a loan that otherwise fell within the ambit of the Act and that they would be required to register as “credit providers” in terms of the Act.

In the particular circumstances of the case a businessman had sold his business to a colleague with the purchase price to be paid over five years. As this provision of credit to the colleague fell within ambit of the Act, the court held that the businessman should have registered as a credit provider. As he had not done so, the agreement was unlawful and his claim against his colleague for payment in terms of the agreement failed.

Although there are exemptions from the Act for credit agreements between persons who are not acting at arms’ length (such as family members) it is important to remember to seek legal advice before making any loan or providing any credit (such as in an instalment sale) to any person.

For more information on this case, read below:

Du Bruyn NO and Others v Karsten [2018] ZASCA 143 NCA apply to non credit market loans requires registration Trust to register as credit provider

Du Bruyn NO and Others v Karsten [2018] ZASCA 143 Summary NCA apply to non credit market loans requires registration