Analysis: Is an ‘incidental credit agreement’ pertinent or not?: Nedan (Pty) Ltd v Selbourne Food Manufacturers CC & another

• Jurisdiction: South Africa
• Author: Stéfan Renke
• Citation: (2017) 29 SA Merc LJ 128
• Pages: 128-139
• Published date: 20 August 2019
• Date: 20 August 2019

Analysis

IS AN INCIDENTAL CREDIT AGREEMENT

PERTINENT OR NOT?: NEDAN (PTY) LTD V

SELBOURNE FOOD MANUFACTURERS CC

& ANOTHER

STÉFAN RENKE

Associate Professor, Department of Mercantile Law,

University of Pretoria

I INTRODUCTION

The court in Nedan (Pty) Ltd v Selbourne Food Manufacturers CC &

another ((53658/2010) [2014] ZAGPPHC 979 (18 November 2014)

SAFLII, available at http://www.saf‌lii.org/za/cases/ZAGPPHC/2014/

979.html) had to decide whether the agreement between the parties in

that case is a so-called incidental credit agreement or not. The incidental

credit agreement is one of the credit transactions that are subject to the

National Credit Act 34 of 2005 (NCA; the NCA applies to credit

facilities, credit transactions, credit guarantees or a combination thereof

— s 4(1) read together with ss 8(1), 8(3), 8(4) and 8(5); for a full

exposition of the NCA’s f‌ield of application, see Scholtz et al (eds), Guide

to the National Credit Act Revision Service (LexisNexis 2008) chaps 4 and

8; Kelly-Louw, Consumer Credit Regulation in South Africa (Juta 2012)

paras 2.3.2 and 2.4.3.4; and Otto & Otto, The National Credit Act

Explained 4 ed (LexisNexis 2016) chap 3).

Much has been written on the incidental credit agreement (see eg

Otto, ‘The incidental credit agreement’ (2010) 73(4) THRHR 637;

Renke, ‘Aspects of incidental credit in terms of the National Credit Act

34 of 2005’ (2011) 74(3) THRHR 464; Aucamp, ‘The incidental credit

agreement: a theoretical and practical perspective’ parts1&2(2013)

76(3) THRHR 377 and (2013) 76(4) THRHR 507; Otto & Otto,

(LexisNexis 2016) para 9.3; and Scholtz et al (eds), (LexisNexis 2008)

paras 4.4.1, 8.2.3.3 and 9.1.2). The incidental credit agreement has also

been considered by the courts, where they had to distinguish between an

incidental credit agreement and a credit facility (see e.g. JMV Textiles

(Pty) Ltd v De Chalain Spareinvest 14 CC & others 2010 (6) SA 173

128

(2017) 29 SA Merc LJ 128

© Juta and Company (Pty) Ltd