Conveyancers’ duty of care
Two firms of attorneys were sued by the disgruntled owners of properties on which residential buildings were demolished with the intent that the property be consolidated and that a developer would construct a scheme on the whole and provide each owner with a better home. The developer was sequestrated – as often is the case. The action taken against the attorneys acting on behalf of the developer was based on the allegation that the attorneys had failed to advise those involved in the scheme of the risks inherent in the transaction. The case referred to below turns on prescription but the underlying issues are instructive. Be careful.
Payment in terms of section 129 (3) NCA
The case referred to below is interesting as it deals with default of a creditor and the effect of payment on his behalf. The SCA decided that payment, to a bank, by a third, which payor did not state that it paid on behalf of debtor, which had defaulted on it’s obligations to the bank, did not cure the debtor’s default.
Credit guarantees and registration in terms of section 40 of the NCA
The NCA provides that anyone who provides a credit guarantee or surety should be registered as credit provider in order to validly do so. In this case a suretyship was given wherein the surety bound himself as co-principal debtor. The SCA found that the Act applies to a credit guarantee only to the extent that the underlying contract is a credit transaction. The agreement was found to be a once-off transaction and did not fall within the ambit of the provisions of the NCA. Worth a look for those who deal in these things.