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National Credit Act, 2005 (Act No. 34 of 2005)

Chapter 5 : Consumer Credit Agreements

Part A : Unlawful agreements and provisions

90. Unlawful provisions of credit agreement


(1) A credit agreement must not contain an unlawful provision.


(2) A provision of a credit agreement is unlawful if—
(a) its general purpose or effect is to—
(i) defeat the purposes or policies of this Act;
(ii) deceive the consumer; or
(iii) subject the consumer to fraudulent conduct;
(b) it directly or indirectly purports to—
(i) waive or deprive a consumer of a right set out in this Act;
(ii) avoid a credit provider's obligation or duty in terms of this Act;
(iii) set aside or override the effect of any provision of this Act;
(iv) authorise the credit provider to—
(aa) do anything that is unlawful in terms of this Act; or
(bb) fail to do anything that is required in terms of this Act;
(c) it purports to waive any common law rights that—
(i) may be applicable to the credit agreement; and
(ii) have been prescribed in terms of subsection (5);
(d) the provision results from an offer prohibited in terms of section 74(2) or (3);
(e) it purports to make the agreement subject to a supplementary agreement prohibited by section 91(a);
(f) it requires the consumer to enter into a supplementary agreement, or sign a document, prohibited by section 91(a); or
(g) it purports to exempt the credit provider from liability, or limit such liability, for—
(i) any act, omission or representation by a person acting on behalf of the credit provider; or
(ii) any guarantee or warranty that would, in the absence of such a provision, be implied in a credit agreement;
(h) it expresses an acknowledgement by the consumer that—
(i) before the agreement was made, no representations or warranties were made in connection with the agreement by the credit provider or a person on behalf of the credit provider; or
(ii) the consumer has received goods or services, or a document that is required by this Act to be delivered to the consumer, which have or has not in fact been delivered or rendered to the consumer;
(i) it expresses an agreement by the consumer to forfeit any money to the credit provider if the consumer—
(i) exercises the right of rescission in terms of section 121, except to the extent contemplated in section 121(3)(b); or
(ii) fails to comply with a provision of the agreement before the consumer receives any goods or services in terms of the agreement;
(j) it purports to appoint the credit provider, or any employee or agent of the credit provider, as an agent of the consumer for any purpose other than those contemplated in section 102 or deems such an appointment to have been made;
(k) it expresses, on behalf of the consumer—
(i) an authorisation for any person acting on behalf of the credit provider to enter any premises for the purposes of taking possession of goods to which the credit agreement relates; or
(ii) a grant of a power of attorney in advance to the credit provider in respect of any matter related to the granting of credit in terms of this Act;
(iii) an undertaking to sign in advance any documentation relating to enforcement of the agreement, irrespective of whether such documentation is complete or incomplete at the time it is signed;
(iv) a consent to a pre-determined value of costs relating to enforcement of the agreement except to the extent that is consistent with Chapter 6;
(v) a limitation of the credit provider’s liability for an action contemplated in subparagraph (iv); or
(vi) a consent to the jurisdiction of—
(aa) the High Court, if the magistrates’ court has concurrent jurisdiction; or
(bb) any court seated outside the area of jurisdiction of a court having concurrent jurisdiction and in which the consumer resides or works or where the goods in question (if any) are ordinarily kept;
(l) it expresses an agreement by the consumer to—
(i) deposit with the credit provider, or with any other person at the direction of the credit provider, an identity document, credit or debit card, bank account or automatic teller machine access card, or any similar identifying document or device; or
(ii) provide a personal identification code or number to be used to access an account;
(m) it purports to direct or authorise any person engaged in processing payments to give priority to payments for the credit provider over any other credit provider;
(n) it purports to authorise or permit the credit provider to satisfy an obligation of the consumer by making a charge against an asset, account, or amount deposited by or for the benefit of the consumer and held by the credit provider or a third party, except by way of a standing debt arrangement, or to the extent permitted by section 124; or
(o) it states or implies that the rate of interest is variable, except to the extent permitted by section 103(4).


(3) In any credit agreement, a provision that is unlawful in terms of this section is void as from the date that the provision purported to take effect.


(4) In any matter before it respecting a credit agreement that contains a provision contemplated in subsection (2), the court or the Tribunal, as the case may be, must—

[Words preceding Section 90(4)(a) substituted by section 18 of Notice No. 1081, GG 42649, dated 19 August 2019]

(a) sever that unlawful provision from the agreement, or alter it to the extent required to render it lawful, if it is reasonable to do so having regard to the agreement as a whole; or
(b) declare the entire agreement unlawful as from the date that the agreement, or amended agreement, took effect,

and make any further order that is just and reasonable in the circumstances to give effect to the principles of section 89(5) with respect to that unlawful provision, or entire agreement, as the case may be.


(5) The Minister may prescribe particular common law rights that may not be waived in a credit agreement on the grounds that the waiver of those rights would be inconsistent with the purposes of this Act as set out in section 3.