|
Credit Providers - Register Or Regret!
Suretyships - Name All Names
Steer Clear Of The Verbal Lease
Arrested At A Roadblock! Your Rights
Up The Creek With A Foreign Government
Property Sales : Your Right To Choose
Beware The Altered Cheque (Particularly If You Intend To Discount It)
Using The Liquidation Application As A Debt Collection Tool - A Cautionary Tale
Website Of The Month : Braingle
|
|
|
| |
|
| |
| July 2006 |
|
|
CREDIT PROVIDERS - REGISTER OR REGRET!
The National Credit Act Regulations have now been promulgated and the applicable thresholds gazetted. If you are a business, you need to check urgently whether:-
- You are required to register as a credit provider. In general, you must register if either you provide credit in terms of 100 or more credit agreements, or the total debt owed to you exceeds R500.000
- Your credit agreements are valid
- You have adequate procedures in place to prove that you properly investigated each debtor's ability to afford the credit
- Your credit granting and enforcement policies are still adequate to manage your risk profile (one example - the remedies exceptio errore calculi, exceptio non numerata pecuniae and exceptio non causa debiti may no longer be waived by the customer)
- You have procedures to retain the required records of each deal
- The fees you charge are lawful
Failure to comply with the Act carries substantial risk - you may find yourself with invalid credit agreements, unable to recover goods supplied under them but still obliged to refund all monies received from customers. Talk about adding insult to (double) injury!
The Act and Regulations are complex and contain a host of technical requirements, as well as a multitude of pitfalls to trap the unwary. The above is of necessity no more than a brief summary - get proper and specific advice.
SURETYSHIPS - NAME ALL NAMES
A suretyship agreement is only valid if it is written and signed, and if it clearly identifies all three parties i.e. the creditor, the debtor and the surety. Thus in a case where the debtor was referred to only as "the franchisee", and in another where the debtor's name was implied but not stated, the suretyships were held to be invalid. The message to creditors is clear - make sure that your suretyship documents are (1) correctly drawn, and (2) filled out in every detail!
STEER CLEAR OF THE VERBAL LEASE
Whether you be landlord or tenant, do not ever rely on a verbal lease. You won't want to pay a legal team to argue their way through a variety of Courts about what the terms of the lease were, nor about whether or not two 17th century Dutch statutes abolished the tenant's lien (i.e. a right to retain possession of the premises) for improvements effected to the property.
That's exactly what happened in a recent Supreme Court case. It was held that the abolition of the lien applies only to agricultural land; so if you are a tenant on rural land, make doubly sure of your rights before effecting any improvements.
In all cases, a written lease should clearly set out the rights and duties of both parties regarding tenant improvements.
ARRESTED AT A ROADBLOCK! YOUR RIGHTS
Beware the advice given in an e-mail doing the rounds with the subject line "Law Society Notice - Know Your Rights!" - it purports to give advice on your rights if you are threatened with arrest at a roadblock for unpaid traffic fines. But it does not originate from any Law Society; it is incorrect in several important respects; and following its advice could cost you a very unhappy night or weekend in a police cell.
What you should do is: -- Avoid confrontation.
- Call in legal assistance immediately.
- Insist on seeing the warrant of arrest. It need not be an original (despite what the e-mail says).
- If no copy of the warrant is produced "as soon as practically possible", advise the police that you believe them to be acting unlawfully and that you will sue them if they persist in arresting you. However do not resist arrest even if think you are sure of your legal rights.
If you are arrested and detained unlawfully, get legal advice at once on your right to sue for damages.
Of course the best advice is to pay your traffic fines in the first place!
UP THE CREEK WITH A FOREIGN GOVERNMENT
Supplying goods or services to a foreign government may seem like a nice risk-free deal, but be aware that if things go wrong, you are on your own.
Even if you successfully obtain judgment in a South African court, it may well be unenforceable - your right to execute against any property of the foreign government is limited to property 'in use or intended for use for commercial purposes'. So you can't touch those fancy consular offices, and the Ambassador's Merc and Residence are definitely out of reach. You are up the creek.
Now the Supreme Court has held that, if you have difficulty in enforcing the judgment, the South African government has no duty to intercede on your behalf. There goes your paddle.
PROPERTY SALES : YOUR RIGHT TO CHOOSE
When you buy and sell a house or other immovable property, don't give up your rights to choose! The Seller should choose which attorney is to attend to the transfer. The Buyer should choose which financial institution to approach for a bond (if needed), and whether or not to apply direct or via a bond originator. If you come under pressure to give up any of your rights to choose, get legal advice immediately.
BEWARE THE ALTERED CHEQUE (PARTICULARLY IF YOU INTEND TO DISCOUNT IT)
Regard with caution any cheque bearing an alteration, even if you are absolutely sure that the alteration is fully authorised and valid. Any alteration may render the cheque not "complete and regular on the face of it". In a recent case, where the dates on printed cheques had been quite validly altered in manuscript, a finance company, which had discounted the cheques for the original payee, found itself having to deal with a dispute relating to the original transaction. This it would have avoided had the cheques not been altered - for in that case it would have been a "holder in due course", immune from such disputes.
USING THE LIQUIDATION APPLICATION AS A DEBT COLLECTION TOOL - A CAUTIONARY TALE
Instituting a liquidation application has long been seen as a powerful debt-collecting tool. But it must be used with care; success depends on meeting an array of formal requirements, and inadvertently killing off a viable business will be counter-productive.
Worse, if you are considered to have "abused the court's process" (for example by applying for liquidation where the amount owing is in dispute) you could find yourself, as did an applicant in a recent case, paying the alleged debtor's costs on a punitive ("attorney and client") scale - an expensive lesson in how not to collect a debt.
WEBSITE OF THE MONTH : BRAINGLE
Time out on the World Wide Web.
When you need a quick but productive break from a busy day (or the evening TV is even more boring than watching paint dry), surf your way to Braingle at www.braingle.com
A wide selection of Brain Teasers, "Mentalrobics Exercises" and Games will keep you mentally fit and refreshed. "The largest collection anywhere on the internet" promises to entertain and de-stress you, whilst flexing your mind, improving your creativity and boosting your memory.
Note: Copyright in this publication and its contents vests in LawDotNews(law.news)
|
 |
| |
 |
|
 |
|
|
|
|
