Many companies don't bother with suretyships. However, what we have seen over many years in legal practice is that creditors that hold suretyships often get paid if a debtor fails. As a result, it is definitely worth requiring suretyships wherever possible.
A suretyship should be clear in relation to business rescue and also, it should state that an approved business rescue plan will not limit or exclude the liability on the part of the surety. Furthermore, a suretyships must comply with Section 6 of the General Law Amendment Act. In conclusion, a suretyship must be properly formulated in order to be binding.
We are often asked what interest rate should be used in terms and conditions. Before the introduction of the National Credit Act, 2005, it was common to link the interest to the maximum interest rate permissible under the Usury Act. Since the introduction of the National Credit Act in 2005 compliance has become more complicated. Consequently, it is better to simply select a defined rate. That way your customer knows what it is and if you institute legal proceedings, you don't have to prove the rate.
We believe that it is important to describe the warranties that are provided to customers. In part due to the introduction of the Consumer Protection Act, your customers will want to know what warranties are offered. Also, by describing the warranties in your terms and conditions, you can also limit your own liability.
It is important that you obtain a consent from your customers to conduct searches at a credit bureaux and also, to report information to the credit bureaux regarding the customer's account.
Very few companies have managed to avoid being defrauded in one way or another. A common tactic by fraudsters is to get a customer to make payment into a different bank account. When this happens it is often very tricky, as your customer has technically paid in full, but into the wrong account. When the email notification of a change in banking details actually comes from your email domain, it gets even trickier. Therefore, the simple solution is to ensure that your terms and conditions make it clear that you will not change banking details, and also that they outline the steps that the customer must take if it receives any notification from you about a change in banking details.
Limitation of Liability
Probably one of the most important provisions of your terms and conditions must be a clause that limits your liability for consequential losses.