Saflii Reinstatement Of Credit Agreement

October 5, 2021

Navsa ADP and Pillay JA (Maya, Malan JJA and Swain AJA) considered, referring to English and South African decisions, that the construction or performance guarantees which correspond in English law to performance bonds were practically promissable notes payable on demand. A performance guarantee was based on a basis similar to that of a credit. A bank that gave a performance guarantee had to comply with it in accordance with its conditions. It was not a question of the relationship between the parties to the main contract, nor of whether or not a party to the main contract had fulfilled its contractual commitment, nor of whether one of the parties was overdue or not. The guarantor (complainant) had to pay in accordance with his guarantee, on request, if prescribed, without proof or condition. The only exception was when there was obvious fraud of which the guarantor was aware. The guarantees of benefits had to be fulfilled according to their conditions and disputes relating to the main contract could be dealt with at a later stage. The real confusion arises when the amended section 129(4) is added to the image. Previously, the points of the operating procedure were indicated, under which the consumer can no longer reinstate the contract. These are now points in the process where the credit provider can no longer reinstate the contract. Listing these restrictions from the point of view of the credit provider rather than the consumer is strange and a literal reading makes little sense.

However, it is necessary for there to be an indication of the date on which the right founded in Article 129(3) can no longer be exercised, and it could be assumed that, despite deficient wording, this is still the purpose of Article 129(4). The idea that the lender now has a kind of right of reintroduction is incomprehensible and it must therefore be considered that the legislator does not express its true intention in coherent language. 16. S 130(3) (c) (ii) (dd) provides that where the consumer has updated the payments provided for in the notice of delay before the creditor goes to court, the court cannot even hear the matter. . . .

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