A May 2025 High Court judgment found that a guarantor who failed to reject a second call on an on-demand performance guarantee within five days was bound to honour the demand. The terms of the guarantee incorporated the Uniform Rules for Demand Guarantees (the URDG) which precluded the guarantor from later disputing the demand on
On 13 August 2025, the High Court held that the acknowledgement of debt under consideration was a credit agreement under the National Credit Act due to the deferral of the payment to a future date and interest charged on all overdue amounts until final payment. The court dismissed an application for payment of the debt
This blog was co-authored by Adriaan Lourens, Candidate Attorney.
In July 2025, the Supreme Court of Appeal dismissed an appeal concerning a payment made to a creditor pursuant to a sale of business agreement after the liquidation of the seller. The judgment reinforces the centrality of the concursus creditorum in South African insolvency law, (which
This blog was co-authored by Adriaan Lourens, Candidate Attorney.
In July 2025, the high court again confirmed the well-established principle that demand guarantees are independent of the underlying contract. A guarantor must pay upon receipt of a valid demand, even if disputes exist between the parties to the underlying agreement. This obligation can only be
This blog was co-authored by Adriaan Lourens, Candidate Attorney.
In May 2025, the high court confirmed a lender’s right to enforce a pledge and cession agreement over a member’s interest in a close corporation (the debtor), despite the debtor having entered business rescue.
The lender had advanced two loans to the debtor. To secure the
The prescribed rate of interest is 10.75% per annum with effect from 1 July 2025. The previous rate was 11.00% per annum.
According to the Prescribed Rate of Interest Act, interest on debts where no rate is prescribed is calculated at the repo rate plus 3.5%. The prescribed rate of interest applies to all debts
In May 2025, the High Court found that a bundled credit life insurance product contravened the National Credit Act of 2005 by providing cover to policyholders who could not benefit from the cover offered. The credit life product included disability and retrenchment cover which the credit provider sold largely to pensioners, and to disabled persons
At the end of May 2025, the High Court held that where notice is given by the credit provider to the consumer under section 129(1)(a) of the National Credit Act drawing attention to a default, the credit provider must negotiate with the consumer who wants to make arrangements to pay off the arrears. The credit provider
This blog was co-authored by Adriaan Lourens, a Candidate Attorney.
In a May 2025 High Court judgment, the court held that, in the absence of a contractual provision expressly requiring written termination, an oral termination of a suretyship agreement is legally valid. This judgment provides useful guidance on the distinction between the formation and cancellation
In an April 2025 judgment, the High Court concluded that the defendant’s liability as a surety was not discharged by the release of the principal debtor under a business rescue plan (BR Plan). The BR Plan and the deed of suretyship were both clearly drafted to preserve the creditor’s right to claim from the surety.