n Tydskrif vir die Suid-Afrikaanse Reg - Mora interest, consensual interest, incidental credit agreements and the National Credit Act
2012 6 SA 60 (GSJ) : regspraak

Volume 2014, Issue 2
  • ISSN : 0257-7747
  • E-ISSN: 1996-2207



The dust around the incidental credit agreement just does not want to settle despite it being fully described by various authors and explained by some judges. This is not surprising. The incidental credit agreement is a newcomer to our law, having been introduced by the National Credit Act (34 of 2005). It is one of eight species of a credit transaction. The credit transaction itself is one of four forms of the genus "credit agreements" (see s 8(1) and (4) of the National Credit Act). The incidental credit agreement is not only new to our law, its definition in the act is also as inaccurate as that of many other definitions in sections 1 and 8 of the act (see for criticism of the definitions of the various credit agreements and the sub-categories of credit agreements, Scholtz (ed) (2008) par 8 2; Kelly-Louw (2012) par 2 4; Otto and Otto (2013) par 9). My own criticism has been described by Kelly-Louw, to paraphrase her words slightly, as "harsh" (par, "rigorous" (par and "strongly disapproving" (par The opinion was expressed right from the start that the term "incidental credit agreement" is "rather meaningless in South African legal terminology" (Otto (2006) 17 par 9.3). These sentiments were shared by Wallis J in (2010 6 SA 173 (KZD)). He described the choice of the expression "incidental credit agreement" as an "unhappy one" (180E-F). Be that as it may, the incidental credit agreement is now part of the legal landscape in South Africa, and a very important one indeed. There are large multinational listed companies which conclude these contracts on a daily basis and on a very large scale. It is therefore of the utmost importance to consumers and credit providers alike that the courts get things right when they pronounce on a certain contract and have to decide whether it constitutes an incidental credit agreement or not. The incidental credit agreement receives special treatment in the National Credit Act. Many of the act's important provisions do not apply to incidental credit agreements at all, whilst others do (s 5 of the act).

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