# Regulatory Compliance Category > Consumer Protection Act Forum >  NCA / CPA grey area

## BuyNoEvil

IN terms of the NCA, credit transactions entered into with juristics with a turnover or asset value R1M or above are excluded and the NCA does not apply. Thus these agreements cannot be classed as credit agreements in terms of the NCA.

The CPA exempts credit agreements in terms of the NCA from CPA applicability.

The CPA's threshold for transactions by juristics as consumers to fall outside of the CPA is R2M.

Thus the grey area. The CPA would apply to credit transaction entered into between juristic persons with a t/o or a/v of greater than R1m up to R2M. Full CPA applicability in respect of what everyone would generally regard as a "credit agreement". Also  means that suretyships signed in respect of these transaction would fall under the CPA.

Looking for the clever people to comment. Am I correct in my thinking?

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## Dave A

> The CPA would apply to credit transaction entered into between juristic persons with a t/o or a/v of greater than R1m up to R2M. Full CPA applicability in respect of what everyone would generally regard as a "credit agreement". Also  means that suretyships signed in respect of these transaction would fall under the CPA.


What effect does the CPA have on suretyships?  :Confused:

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## BuyNoEvil

Part of my post relates to that.

In terms of the NCA, and case law, a suretyship is of an accessory nature, and one would have to look at the principal debt and applicability of the NCA to that debt in order to see whether the NCA applies to the suretyship. So, if the NCA does not apply to the principal debt, then the NCA also does not apply to the suretyship. If the NCA does not apply, then neither the principal debt or suretyship can be regarded as a credit agreement in terms of the NCA. (one of the exclusions of the CPA).

The point thus is that if the NCA does not apply, then there is nothing preventing the CPA from applying.

All the rules of the CPA, such as, plain and simple language, disclosure requirements, fair and honest dealings, fair pricing, unconscionable conduct, etc, etc.

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## mbsmit

Hi there,

According to my understanding, the CPA does not apply to transactions between juristic entities, regardless of their turnover (therefor called the *CONSUMER* Protection Act).

Regards,
Mr Smit

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## Dave A

> According to my understanding, the CPA does not apply to transactions between juristic entities, regardless of their turnover (therefor called the *CONSUMER* Protection Act).


 :Oops:  Well, we'd better be correcting that, then  :Stick Out Tongue: 

A juristice person which has assets under R2 million and a turnover under R2 million is a consumer in terms of the CPA.

If either turnover or assets held exceed R2 million, only then does it no longer enjoy protection as a consumer by the CPA.

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## BuyNoEvil

If I could just add to that as follows:

Section 14 of the Act dealing with expiry, cancellation and renewal of fixed term contracts do not apply to juristics at all, irrespective of t/o or a/v.

Section 60 (Safety monitoring and recall) and Section 61 (Liability for harm or damage caused by goods) always applies, even if a transaction is exempt from the provisions of the Act.

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Dave A (20-Oct-11)

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