Section 127 of the National Credit Act: A form of statutory repudiation – how it modifies the common law

Vessio, Monica

Abstract

The interpretative and practical implications of the National Credit Act’s 173 sections, the schedules and regulations are still being seen and will be seen for many years to come, especially as the legal environment absorbs various amendments and regulations in relation to the Act. S 127 of the Act provides the consumer with a right of statutory repudiation without the usual accompaniment of breach of the agreement. The section regulates the procedure from the time the consumer decides to repudiate and surrender the goods that are the subject of the credit agreement, as well as the rights and duties of both the consumer and credit provider once the consumer has repudiated. S 127 of the Act entitles consumers to repudiate instalment agreements, secured loans and lease agreements without effectively breaching the contract, as breach is understood in our common law and therefore without eliciting the normal remedies that are available to a credit provider in such instances, namely specific performance, cancellation and damages. The article posit that s 127 promotes a ‘self-help’ stance by the consumer who can now, if feeling financially strained, simply return the goods he/she purchased on credit; definitely a form of statutory repudiation without, however, the presence of the element of wrongfulness.
It is also argued that the section is a dramatic consumer right given the implications that it has for credit providers, especially in the event of a general national or global economic crisis leading to potential on masse statutory repudiations in terms of s 127 of the Act. It has also been suggested that credit providers will potentially have to develop a second-hand department in order to deal appropriately with the returned goods and abide by the statutorily mandated procedure, increasing their operational costs, which in turn will result in a download of such costs onto consumer goods. Presently, this appears to be an underutilised right by consumers generally; however, a spike could be seen in the event of economic turmoil, a situation credit providers may want to prepare themselves for.

• Journal Article Type: Article
• Acceptance Date: Jul 1, 2015
• Publication Date: Jan 1, 2016
• Deposit Date: Oct 28, 2020
• Journal: Speculum Juris
• Print ISSN: 0584-8652
• Peer Reviewed: Peer Reviewed
• Volume: 30
• Issue: 1
• Series ISSN: 0584-8652
• Public URL: https://uwe-repository.worktribe.com/output/6820038
• Publisher URL: http://specjuris.ufh.ac.za/sites/default/files/SJ%20VOL%2030%20PART%201%202016%20Vessio.pdf