n SA Mercantile Law Journal = SA Tydskrif vir Handelsreg - Redress in terms of the National Credit Act and the Consumer Protection Act for defective goods sold and financed in terms of an instalment agreement

Volume 26, Issue 2
  • ISSN : 1015-0099
  • E-ISSN: 1996-2185



The scene seems all too familiar, representative of thousands of similar agreements concluded every day in South Africa. The consumer buys a motor vehicle from a motor dealership. He cannot pay the full amount of the purchase price immediately. The motor dealership assists him to apply for finance at a financial institution (for example, a bank). After that, the motor vehicle is financed and an instalment agreement (previously called an instalment sale agreement) is concluded between the consumer and the bank. Within six months after the delivery of the vehicle, the consumer starts to experience problems with it, and it becomes clear that the vehicle is of an unsatisfactory quality, cannot be used for the purposes for which it was bought, and is defective. If the customer attempts to hold the motor dealership responsible, the dealership argues that it no longer owns the vehicle and that the bank should be approached. Indeed, the dealership argues that the bank was the seller of the vehicle - which it often is. Should the consumer attempt to hold the bank responsible, the bank refers to the instalment agreement in which any warranty as to the condition of the vehicle is expressly excluded, and the bank also argues that it only financed the deal. After all, the bank is not a seller of vehicles in the first place.

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