The consumer's right to surrender the goods in terms of section 127 of the National Credit Act 34 of 2005

Abstract

The purpose of the dissertation was to investigate one of the National Credit Act’s (34 of 2005, “NCA”) early termination rights, the right to surrender the goods in terms of section 127. This right is afforded to the credit consumer in terms of an instalment agreement, lease agreement, or a secured loan. All these agreements are credit transactions subject to the NCA involving movable goods. The features of these transactions were investigated, to ascertain whether they share any common characteristics qualifying them for inclusion under section 127. The general field of application of the NCA was also provided, because the NCA must be applicable for the surrender-right to apply. Section 127 is discussed in detail, with reference to the restrictions on the right to surrender, the implementation of the right, the process involved, and the advantages and disadvantages of the right. Case law was also considered and the principles laid down by the courts applied in the dissertation. The conclusions were reached that section 127 provides for a fair process, and balances the rights and responsibilities of credit providers and consumers. This is in line with section 3(d) of the NCA, which aims to promote equity in the credit market, by balancing the respective right and duties of credit providers and consumers. It was further concluded that the section 127-right affords important consumer protection, which is in line with one of the NCA’s main purposes in section 3 of the Act. In conclusion, although amendments to the section 127 provisions were recommended, the inclusion of the consumer’s extraordinary right in terms of the NCA to surrender the goods was welcomed.