A LOAN BETWEEN FRIENDS AND THE CREDIT ACT
Fourie and Geyer had been friends for 18 years and concluded an Acknowledgment of Debt (AoD) for a loan of R831 000.
In reply to Fourie’s claim for repayment, Geyer contended that the AoD was a credit agreement and subject to the National Credit Act 34 of 2005.
Because Fourie was not registered as a credit provider and no credit assessment was conducted, Geyer argued that the AoD was unlawful for non-compliance with the NCA.
The relevant text of section 4 of the NCA reads:
“this Act applies to every credit agreement between parties dealing at arm’s length . . .
In any of the following arrangements, the parties are not dealing at arm’s length:
. . . a credit agreement between natural persons who are in a familial relationship”.
 The relationship between the parties which underpins the AoD overwhelmingly demonstrates anything but a familial relationship. Save for the fact that the parties are friends, the agreements which gave rise to the AoD, are clear business transactions which are greatly to the benefit of or advantageous to the applicant and clearly concluded at arm’s length.
Compare with the facts in Du Bruyn NO v Karsten  ZASCA 143 (SCA) 28 September 2018
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