The credit consumer’s right to terminate a credit agreement subject to the National Credit Act 34 of 2005 in advance

Abstract

One of the main purposes of the National Credit Act 34 of 2005 (“NCA”), the consumer credit enactment currently effective in the Republic, is to protect the consumer. This is inter alia achieved by affording rights to a credit consumer to terminate a credit agreement subject to the NCA in advance, in other words before the date agreed on by the parties in the agreement for the agreement to come to an end. However, these rights to terminate a credit agreement in advance, the right to rescind (also known as the “cooling-off” right) or settle the agreement, or to surrender the goods in terms of the agreement, only apply if the NCA is applicable to a particular credit agreement. With this purpose in mind, a brief overview of the credit agreements the NCA applies to, is provided. However, it will be indicated that some of these rights only have limited application, inter alia regarding the type of credit agreement involved. The consumer is protected by being allowed to terminate the agreement in advance in various respects, for instance getting rid of a costly credit debt. The aim with this dissertation is to investigate the provisions in the NCA affording the early termination rights to the consumer, to compare their fields of application and the protection afforded by each, and to make suggestions for improvement of the NCA’s provisions, if any. It is finally concluded that the inclusion of these early termination rights in the NCA must be welcomed.