Allen West asked the following: "Could you please assist me as to where in the NCA it addresses the waiver of legal exceptions in bonds. As I understand it, the Latin maxims are not permitted, but the defences may still be waived. Am I correct?"
To which Ingrid Broodryk replied:
"In terms of Section 90 (2 (c)) of the NCA, a provision of a credit agreement is unlawful if it purports to waive any common law rights that may be applicable to the credit agreement and have been prescribed in terms of subsection (5). In terms of subsection (5), the Minister may prescribe particular common law rights that may not be waived in a credit agreement.
Regulation 38 of the NCA reads as follows:
"The following common law rights or remedies that are available to a consumer may not be waived in a credit agreement:
(a) Exceptio errore calculi;
(b) Exceptio non numeratae pecuniae;
(c) Exception non causa debiti.
The unlawful provision is void, not the whole agreement. The provision must be severed from the agreement. However, a court can declare the entire agreement unlawful.
It is has nothing to do with the fact that the provisions are in Latin. It is the provision itself that is unlawful, even if expressed in English.
However, it is advisable to express the other common law remedies that may still be used in language that the consumer will understand. You can still use the Latin but should provide an explanatory note."
Cliffe Dekker Inc